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Businesses fear legal quagmire
Neelam Verjee
British business has criticised Europe for “badly drafted” law that, if enacted, could impinge on consumer choice, drag companies into a legal quagmire and undermine Britain’s financial services sector.
The CBI and the British Retail Consortium (BRC) are calling for an urgent review of legislation that would give consumers the upper hand in cross-border trade disputes, before it goes to the European Parliament for debate this week. The proposals, known as Rome 1, would open companies to lawsuits filed in any of the member countries and force them to navigate the 27 legal regimes in place across the European Union.
The law would give a Spanish customer dissatisfied with a product bought from a UK-based website the right to mount legal action under Spanish law, in a Spanish court, against the UK-based firm.
The BRC has said that the European Commission’s failure to consider properly the impact of the new legislation could make it virtually impossible for internet retailers to sell products outside their own country. Alisdair Gray, the Brussels director for the BRC, said: “It would damage both retail entrepreneurs looking to expand and consumers, who have benefited from the increased choice and competition that free and open internet trade has brought.”
The CBI said that, to avoid the legal risk, companies might opt to do legal business outside of the EU — in New York, for example. The European Commission has argued that the proposals ensure legal certainty for the consumer and bring clarity to a previously unpredictable system.
Neelam Verjee
British business has criticised Europe for “badly drafted” law that, if enacted, could impinge on consumer choice, drag companies into a legal quagmire and undermine Britain’s financial services sector.
The CBI and the British Retail Consortium (BRC) are calling for an urgent review of legislation that would give consumers the upper hand in cross-border trade disputes, before it goes to the European Parliament for debate this week. The proposals, known as Rome 1, would open companies to lawsuits filed in any of the member countries and force them to navigate the 27 legal regimes in place across the European Union.
The law would give a Spanish customer dissatisfied with a product bought from a UK-based website the right to mount legal action under Spanish law, in a Spanish court, against the UK-based firm.
The BRC has said that the European Commission’s failure to consider properly the impact of the new legislation could make it virtually impossible for internet retailers to sell products outside their own country. Alisdair Gray, the Brussels director for the BRC, said: “It would damage both retail entrepreneurs looking to expand and consumers, who have benefited from the increased choice and competition that free and open internet trade has brought.”
The CBI said that, to avoid the legal risk, companies might opt to do legal business outside of the EU — in New York, for example. The European Commission has argued that the proposals ensure legal certainty for the consumer and bring clarity to a previously unpredictable system.
