Brexit: Consumer Protection (European Union Committee Report)

Earl of Kinnoull Excerpts

Wednesday 16th January 2019 Lords Chamber

[The Earl of Kinnoull (CB)]

My Lords, it is a great pleasure once again to follow the noble Lord, Lord Judd, who spoke with his typical wisdom. He is the conscience of our sub-committee, and we value him enormously. I declare my interests as set out in the register of the House, in particular those in respect of consumer financial services.

I will also begin by adding my tribute to our staff. The Justice Sub-Committee staff are especially hard-worked, because they are also the legal resource for the main Select Committee and all the other sub-committees as well. We have now published, as a whole structure, 38 unanimous reports, which are of a very high quality, and this report was no exception. I add my warm congratulations to our energetic chair, the noble Baroness, Lady Kennedy of The Shaws, who made an excellent speech. Writing a speech is like writing an essay, is it not? It is jolly hard to write a short one that is nice and clear, and hers certainly was clear and short.

Consumer protection has two main elements: efforts to protect the consumer before they buy the goods or services, and efforts to give the consumer access to remedies when things have gone wrong after they have bought them. I will confine myself to three important matters on which I ask the Minister for an update.

The first is about the European Committee for Standardisation—CEN—and its electrical sister, CENELEC. These bodies are not EU bodies but European bodies, and are well tried and tested committee structures that bring together the national standards for safety and quality in 34 countries today. The post-Brexit problem is set out in paragraphs 33 to 35 of our report and lies in the fact that CEN and CENELEC’s eligibility for membership is currently limited to,

“an EU Member, an accession country or an EFTA country”.

The rules were not written with a Brexit in mind.

Witnesses told us, and we agreed, that it was vital that the UK got the eligibility criteria altered so that the UK retained its membership. At paragraph 41, we recommended that the Government support the British Standards Institute’s efforts to achieve British membership post Brexit. The Government’s response essentially said that that was the BSI’s problem alone, but that they would remain “in close contact” with it. I need hardly say that we found that disappointingly lukewarm and not at all in the spirit of the Government’s many commitments to maintaining consumer protection at the commendably high levels that the UK enjoys.

The White Paper on the future relationship did not cast any further light on the situation, nor did the political declaration, both documents being drafted at a rather higher level. I ask the Minister for an update on where we are with CEN and CENELEC.

My second point concerns the consumer protection co-operation regulation. The CPC regulation provides the mechanism for the exchange of information between national enforcement bodies, such as the CMA and, where necessary, empowers them to bring legal action to enforce consumer protection laws. Starting in 2016, the Commission sought to develop and modernise the CPC mechanisms for co-operation. Importantly, the new regulation, which has since emerged, encourages co-operation with non-EU member states.

At paragraph 75, we urged the Government to engage with that aspect. In their response, the Government said:

“The UK has worked with the European Council to agree an ambitious new CPC regulation which strengthens cross-border cooperation and enforcement for the new digital environment. We are pleased that progress was made to agree this file by the end of 2017”.


That was all good news, and the new regulation will come into force in 2020, but did not answer our point at paragraph 75, which was that the Government should,

“make every effort to engage the provision in the reformed Regulation … that encourages cooperation with non-EU Member States”.

There is no help in the political declaration on this matter, so can the Minister update us on whether the Government are planning to co-operate as a non-member state post Brexit, per the reformed CPC regulation and, assuming that that is the case, what they have done about it so far?

My final area of concern is the mutual recognition of judgments and civil justice co-operation generally. When things have gone wrong for a consumer, they need to be able to rely on the court system. This is highly important for consumers buying goods or services in the EU today, as others have observed. It helps to provide that vital confidence that underpins international trade, which in turn drives prosperity. Today, a British consumer can go to a British court with a problem, obtain a judgment and have it enforced in any EU country. I do not mind repeating that, because it is vital.

As I have already observed, the Government have often stated their commitment to consumer protection in the Brexit process. Indeed, they published their framework proposal on this area in June last year, and more detail was contained in the White Paper of July, which stated:

“The UK is therefore keen to explore a new bilateral agreement with the EU, which would cover a coherent package of rules on jurisdiction, choice of jurisdiction, applicable law, and recognition and enforcement of judgements”,


and that the UK will therefore seek to participate in the Lugano convention after exit.

However, in their paper Consumer Rights If There’s No Brexit Deal of October last year, the Government warned:

“UK consumers will also no longer be able to use the UK courts effectively to seek redress from EU based traders, and if a UK court does make a judgement, the enforcement of that judgement will be more difficult as we will no longer be part of the EU. In addition, there will no longer be reciprocal obligations on the UK or EU Member States to investigate breaches of consumer laws or take forward enforcement actions.”


In the current situation, it is of course impossible to be sure where we will end up, or indeed when, but we can plan and take out at least some insurance that would help in several of the potential outcomes.

The Lugano convention concerns the recognition and enforcement of judgments and covers the EU, Switzerland, Norway and Iceland. Were we to leave the EU, early accession to that convention would certainly form part of the “coherent package of rules” mentioned in the White Paper, but importantly our accession to it would need the consent not just of the EU but of Switzerland, Norway and Iceland. Accordingly, making progress early is extremely important. I have asked some Written Questions of the noble and learned Lord, Lord Keen, who responded in October, saying that there had been some limited progress. I therefore close by asking the Minister to update us further on the Lugano convention position.