The European Parliament has published a study exploring a product lifespan Guarantee model for the EU. It was produced by the iff led consortium for expertise in the field of Contract Law. The study was led by Prof. Dr. Klaus Tonner (University of Rostock) together with Prof. Rosalind Malcolm (Guildford Chambers and School of Law, University of Surrey) and the iff team of legal experts. The study can be found here:
How an EU Lifespan Guarantee Model Could Be Implemented Across the European Union
Abstract of the Study
This study was commissioned by the European Parliament’s Policy Department for Citizens’ Rights and Constitutional Affairs at the request of the JURI Committee. It looks at the interrelation between the Consumer Sales and Guarantee Directive (CSD) and the Ecodesign Directive (EDD) with respect to guarantees and product expected lifetime. Through legal research and stakeholder surveys, it develops an EU lifespan guarantee model, which could be implemented by amendments to the proposal for an Online Sales Directive (OSD) and the EDD. It recommends extending the EDD to include the lifespan and extending the limitation period of the OSD. A commercial guarantee for the lifespan of a product is also suggested.
Sustainable consumption affects two fields of European policy: consumer policy and environmental policy. Sustainability is an aim of consumer policy, and sustainable consumption is a component of environmental protection policy. One of the elements of both fields of policy is the durability of consumer goods: they should last as long as technically possible to save the resources and energy which would otherwise be necessary to replace them.
The existing EU law meets the requirements of a policy to support sustainable consumption with regard to the lifespan of consumer goods in only a very limited way. Two legal instruments can be identified, which are of relevance to the lifespan of products: The Consumer Sales and Guarantee Directive (CSD), and the Ecodesign Directive (EDD). However, because the CSD provides for a limitation period of a legal guarantee of two years, this means that a seller is liable for the lifespan of a product only for this period. Likewise, the EDD is in practice only applied to energy-related problems, not for those linked to durability and lifespan. It is therefore necessary to examine whether these two legal instruments are nevertheless adequate legal means capable of providing a reasonable legal frame that can encourage manufacturers to consider a lifespan as long as feasibly possible in the design of their products.
The current status of the CSD is that the European Commission has adopted a proposal for a Directive on Online Sales (COM(2015) 635), which could be extended to all consumer sales (that is, face-to-face sales) thereby replacing the existing CSD. A new Working Plan (COM(2016) 773) was adopted in November 2016 for the EDD which contemplates future development of the EDD. So the co-legislators could take the opportunity to amend these proposals and instruments in order to allow them to meet the requirements of a legal frame for an adequate lifespan of consumer goods. This In-depth Analysis can thus be seen to complement the European Parliament study ”A longer lifetime for products: Benefits for consumers and companies” (IP(A/IMCO/2015-11) by focusing on the legal aspects of the subject.
Consumer Sales Law
The aim of the study is to propose amendments to the two proposals of the Commission to provide for an EU lifespan guarantee model. With regard to a recast of the Consumer Sales Directive three questions must be scrutinized:
1. Is an extension of the two years limitation period of the present EU law an adequate instrument? Seven member states can be identified with longer periods on the basis of the minimum standard character of the present Directive. To make use of their experience, the study evaluates a survey of answers to a questionnaire of legal experts from these member states to identify, whether one of the national laws is ”best practice” in the sense that it could be recommended as a model for European law.
2. The present Directive provides for a reversal of proof for a period of six months after delivery: the seller has to prove, that a lack of conformity did not exist at the time of delivery if such a lack appears during the six months period. The aim of the study is to examine, whether an extension of this period – the proposal of the Commission provides for a reversal of proof for the full length of the limitation period – is an adequate means for a lifespan legal guarantee.
3. According to the present Directive, a commercial guarantee is only a voluntary commitment of the producer. The study scrutinizes the commercial guarantee and considers whether it could be re-drafted as an instrument which strengthens a lifespan legal guarantee.
The aim of the study is to scrutinize, whether an amended Ecodesign Directive could work together with an amended Consumer Sales Directive for a lifespan guarantee model. Specific lifespans of products cannot be regulated by consumer contract law, which is according to its nature more general. So the Ecodesign Directive has to be examined to review whether its application can be extended to cover the lifespans of specific product groups enforceable through a lifespan guarantee model which is part of consumer sales law. The study includes the experience of stakeholders, which is collected by a survey.
Consumer Sales Law
Seven EU and EEA member states provide for a longer limitation period than two years as permitted by the Consumer Sales Directive. This is admissible under the existing Directive which is a minimum standard Directive. However, the proposed Online Sales Directive is to be a full harmonisation Directive which means that longer limitation periods could not be maintained by member states. The survey carried out in the study identifies three different models of longer limitation periods in the member states: the two common law member states (Ireland and the United Kingdom) traditionally have longer limitation periods (six years), whereas Sweden extended the limitation period generally to three years. In Iceland and Norway, a basic limitation period applies, which is extended for products with a longer lifespan than two years to five years. Finnish law provides for a three years period, starting from the date, when the lack of conformity becomes apparent. Dutch law does not provide for a limitation period at all. In the Netherlands, an informal list is in practice, which indicates the normal lifespan of certain categories of technical goods, in particular household equipment. Contrary to the extension of the limitation period in the seven member states mentioned, none of these member states extended the limitation period for the reversal of proof. Only Portugal provides for a two years period, this is to say that the general limitation period and the period for the reversal of proof are identical, as proposed by the Commission in the proposal for an Online Sales Directive. In all other member states, the consumer has to prove from the beginning of the seventh month after delivery that the lack of conformity already existed at the time of delivery. This mitigates the advantages for a lifespan legal guarantee significantly, if a longer limitation period is not accompanied by an extension of the period for the reversal of proof. The survey shows that very different models for longer limitation periods are in place. To meet the requirements of a lifespan legal guarantee, a full harmonising Directive could at least extend the limitation period for products with a longer lifespan to five years, following the Icelandic/Norwegian model, which is also proposed by the draft report (Durand report) about the study ”a longer lifetime for products” submitted to Parliament in 2016. The study recommends an alternative: the limitation period to be extended generally to three years, following the Swedish model, but it to be left to the member states, whether they wish to extend their national limitation periods for products with a longer lifespan than three years through an option clause. This allows member states with a longer period to maintain their rules and allows other member states discretion whether they wish to adopt the same approach.
The study does not only examine national rules with longer limitation periods, but also reviews possible European legal instruments with longer limitation periods. As recommended in the review of the Ecodesign Directive, this Directive should be extended to include lifespan as a factor to be incorporated into product design, which may result in implementing regulations based on the Ecodesign Directive requiring longer limitation periods for specific groups of products. It is necessary to avoid contradictions between the rules in a recast of the Consumer Sales Directive and such regulations in other EU legal instruments for products with a longer lifespan. A provision should be included in a recast of the Consumer Sales Directive, that the limitation period in this Directive shall not preclude longer limitation periods in other European legal instruments. The study stresses that an extension of the period for the reversal of proof compared with the six months of the existing CSD is of utmost importance. Following our suggestion that member states would be free to extend the limitation period on the basis of an option clause, a corresponding extension of the period for the reversal of proof to three years would be allowed. The study recommends amending some information duties to the Consumer Rights Directive. It should be clarified that the information duty about the main characteristics of the good includes the lifespan. This would have the advantage, that the lifespan is part of the legitimate expectations of the consumer and so becomes part of the conformity of the good according to the CSD or its successor. A lifespan legal guarantee cannot define on its own the lifespan of specific products. The study recommends filling the gap through implementing regulations based on an amended Ecodesign Directive. But there will remain in the foreseeable future a wide field of product groups for which a lifespan is not provided for by a regulation based on the Ecodesign Directive. To cover this field the study recommends an obligation of the producer for a commercial guarantee, in which he has to indicate the minimum lifespan of his product. The study does not recommend a general minimum lifespan provided by law, but suggests that, if a lifespan is not guaranteed, the producer has to clearly indicate that he does not guarantee the functioning of the good during its lifespan.
The study found that the Ecodesign Directive (EDD) is already capable of covering issues relating to durability but that it has been limited in practice to design requirements which focus on energy saving. The study found that strategic amendments of the EDD could be made to strengthen its coverage of durability and to specifically include lifespan guarantees within its provisions so that these could be required in implementing regulations for specific products and product groups. It also found that the definition of products to which the EDD applies should be redrafted to cover products having a significant environmental impact to extend coverage to any good having an impact on energy or resource consumption. The study also considered that a reduction on a transitional basis in the threshold figure which triggers the application of the EDD should be implemented. Information requirements for consumers were reviewed and it was found that amendments should be made to the EDD to include a requirement for information about the lifespan guarantees and the relevant market surveillance authority. This requirement for information should also include a statement that nothing affects the rights of the consumer under private law. The study considered the process under which implementing measures are developed and concluded that this process should ensure that consumer groups are fully involved to ensure transparency for lifespan guarantees. A key aspect of the amendment of the EDD to incorporate lifespan guarantees is through the implementing measures where specific lifespans will be incorporated. It was found, therefore, that the implementing measures would need to include the expected lifespan and its length. This led to a consideration of the application of the EDD to product groups and it was found that while the measures could apply still to product groups, there could be a necessity to include the application of the EDD to complex products which would need to be addressed sui generis. Finally, it was recognised that there needed to be flexibility in the EDD to permit innovation and product replacement where that outweighed lifetime savings assessed on a lifecycle basis, so the study concluded that derogations should be permitted where a new product would result in greater resource efficiency.
The recommended policy options and their strengths and weaknesses include:
- Extension of the limitation period of the legal guarantee: (Strength: All goods are covered; legal certainty for the seller; Weaknesses: No distinction between goods with shorter or longer lifetime)
- Extension of period for a reversal of proof regarding conformity of the good at delivery: (Strength: Seller has to prove that good was fit for purpose for a reasonably expected lifetime at delivery; Weaknesses: No clarification on the actual length of the lifespan)
- Extension of limitation period of the legal guarantee only for goods with a longer lifetime: (Strength: Allows a distinction between goods with shorter and longer lifetime)
- Compulsory commercial guarantee for lifetime: (Strength: Producer is liable; Weaknesses: No clarification by law on the actual length of the lifespan)
- Extension of Ecodesign Directive to cover lifespan guarantees: (Strength: Product improvements take place at design stage to enhance environmental impact and product innovation; Weaknesses: Time needed to extend implementing regulations to new products / product groups; extended enforcement and compliance needs)
Potential implementation techniques of a Lifespan guarantee model include:
- Uniform European standardisation for certain types or groups of products:(Strength: Harmonised approach using agreed criteria; Weakness: Needs completely new and complex legal framework)
- Implementing acts for certain types or groups of products using the eco-design framework legislation for the products covered therein: (Strength: Makes use of existing legal framework)
- Information duties of the producer: (Strength: Establishes liability of the producer; easy to implement in the frame of a recast of the Consumer sales Directive)
- Information duties of the seller: (Strength: Establishes criteria for conformity of the good; easy to implement in the Consumer Rights Directive)