Effect of UK leaving the EU on consumers and consumer protection

The UK consumer law framework is a complex combination of national and EU derived law. Following a recent overhaul, it is now dominated by the Consumer Rights Act 2015 (the CRA 2015) and other UK-initiated laws, but a huge amount of our consumer protection law is derived from the EU. A vast range of EU Directives and Regulations implemented in the UK deal with consumer protection rights from: unsafe products, unfair practices, misleading marketing practices to distance selling.

The EU Charter of Fundamental Rights and the European Treaties since the Single European Act guarantee a high level of consumer protection in the EU. Promoting consumers’ rights is also a core value of the EU, enshrined in Article 12 of the Treaty on the Functioning of the European Union (TFEU).

Following the Referendum, the triggering of Article 50 of the Treaty of Lisbon on 29 March 2017 has started the formal process for the UK to leave the EU. This has cast doubt over the continued application of this significant body of EU-derived consumer protection law. For consumers, there is concern that Brexit may lead to a ‘watering down’ of their existing rights and protections. For businesses, who have just got to grips with the new requirements of the CRA 2015 and a new consumer landscape, there is concern that Brexit will bring more uncertainty and change.

The European Union (Withdrawal) Bill, currently progressing through Parliament, would repeal the European Communities Act 1972, which took Britain into the EU. All existing EU legislation would be copied across into domestic UK law to ensure a smooth transition on the day after Brexit. The UK Parliament could then “amend, repeal and improve” the laws as necessary.

From a consumer perspective, the fact that the Government wants to avoid a “black hole in our statute book” by converting directly applicable EU laws into UK laws, will avoid disruption to individual consumers and businesses as the UK leaves the EU. However, in the longer term, it is difficult to predict the impacts for consumers of withdrawal without knowing what the UK’s future relationship with the EU will look like and, crucially, whether the UK retains any sort of access to the European Single Market. There are three possible, and very different, scenarios:

• a future EEA membership of the UK (the Iceland, Liechtenstein and Norway Model);
• a relationship governed only by WTO rules (the WTO Model); and
• a relationship governed by a “tailor-made agreement” (the bespoke model)

All these models are based on existing relationships other countries have with the EU.

It should be noted that the EU Justice Sub-Committee, under the chairmanship of Baroness Kennedy of The Shaws, has launched an inquiry into Brexit: consumer protection rights.

Commentators have argued variously that whatever form Brexit takes, the laws governing relations between consumers and businesses are of vital importance to the future success of the UK. Consumers will be much more likely to purchase goods and services, whether domestically or across borders, if they can be confident of their rights and their ability to enforce those rights.