Consumer Protection in Hong Kong: Safety Laws, Marketing Legislation, and Reform, Slides of Civil Law

Download Consumer Protection in Hong Kong: Safety Laws, Marketing Legislation, and Reform and more Slides Civil Law in PDF only on Docsity! Consumer Protection in Hong Kong 1 Docsity.com Existing situations in Hong Kong • There is no comprehensive trade practices law in Hong Kong. • There are laws and regulations that can be grouped into two categories -- consumer safety -- marketing conduct. 2 Docsity.com Safety and product legislation • When Hong Kong consumers suffer injury or damage caused by defective products, they have to sue for compensation by relying on the common law of contract or negligence. Under contract law, consumers will most likely encounter the problem of privities of contract with the manufacturer; while under the law of negligence, they have to prove all the technical legal elements of negligence. 5 Docsity.com Safety and product legislation • Against this background, the Law Reform Commission of Hong Kong did prepare a report in 1999 proposing to expand the law beyond the ambit of contract and negligence law and create a new form of liability based on the defect approach. This means a product is to be ruled as defective if it does not meet standard of safety that people generally are entitled to expect. • Unfortunately, nothing eventuated from that initiative. 6 Docsity.com Marketing legislation • As to marketing conduct, there are laws in HK: (1) prohibiting false trade descriptions of goods; (2) control and regulation of travel agents; (3) restricting certain advertisements relating to medical matters; (4) prohibiting the promotion of pyramid selling schemes; (5) empowering the courts to give relief in certain contracts found to be unconscionable; 7 Docsity.com Hong Kong’s reactive approach • The Unconscionable Contracts Ordinance was passed in 1995 to codify principles found in common law, and to provide easier access to relief for consumers where the court finds the concerned contract unconscionable. • The Supply of Services (Implied Terms) Ordinance was introduced in 1994 to meet a deficiency in the Sale of Goods Ordinance. 10 Docsity.com Hong Kong’s reactive approach • This legislation, which originated in Britain and commenced in 1896, implies into contracts for the sale of goods only, terms like merchantable quality and fitness for purpose. The new legislation implies into contracts for supply of services, terms as to care and skill, time for performance and consideration. 11 Docsity.com Hong Kong’s reactive approach • Control of Exemption Clauses Ordinance was introduced to limit the extent to which civil liability for breach of contract, or for negligence or other breach of duty can be avoided by means of contract terms and otherwise; and to restrict the enforceability of arbitration agreements. 12 Docsity.com The piecemeal approach: an example of fallacy • The amendments to the Copyright Ordinance, introduced by the Intellectual Property (Amendments Ordinance) 2000, have obviously been enacted with the interests of property right holders in mind. • There are two key issues for consumer protection. The first is what safeguards are in place to protect consumers from misleading and deceptive practices in the market, where infringing articles may be sold. 15 Docsity.com The piecemeal approach: an example of fallacy • The second is what measures are in place to safeguard consumers against the collective actions of property right holders, who in the circumstances of the new criminal provisions, may use the confusion and fear that arises from the amendments, to extract excessive fees from consumers and the business community, i.e., they may exercise their collective market power. • Let us look at the first issue: unfair trade practices. 16 Docsity.com The piecemeal approach: an example of fallacy • What is a right-infringing article? • Where articles for sale are indistinguishable from legitimate articles and a trader who knows the articles infringe intellectual property rights does not declare that the articles are not legitimate, the trader may be engaging in misleading and deceptive conduct by omitting a material fact. A consumer in these circumstances, where there is a reasonable belief that the articles are genuine, would be a victim of an unfair trade practice. 17 Docsity.com A comprehensive legislation against unfair trade practices • The Council advocates a comprehensive trade practices legislation containing: (1) Prohibitions against traders from engaging in, deceptive, misleading, unfair and oppressive conducts in the course of consumer transactions. (2) Breaches of the prohibited trade practices should incur strict liability and lead to both criminal and civil penalties. The penalties may include pecuniary fines in order to deprive the delinquent trader of the profits of the unlawful activity. 20 Docsity.com A comprehensive legislation against unfair trade practices (3) The law should provide a fair and adequate consumer redress mechanism for injured consumers, which may, for example, take the form of monetary compensation, repair order or restitution order. (4) The proposed legislation should be enforced by a public agency. (5) The enforcement agency should be empowered, to institute court proceedings against offenders by seeking court orders for declarations, injunctions, specific performance, damages, etc. 21 Docsity.com A comprehensive legislation against unfair trade practices (6) The enforcement agency should be empowered to accept voluntary assurance or undertaking of compliance from traders who have engaged in unfair and deceptive practices and to enforce the undertaking if breached. (7) It should also be empowered to order publication of correction notices or institution of corporate compliance programmes. (8) The agency should also be empowered to prescribe codes of practices for the conduct of business in specific sectors. 22 Docsity.com Protection against collective actions • Hong Kong's current Copyright Ordinance provides limited safeguards, e.g. where an organization that is representative of persons claiming that they require licenses for the public performance of their work, it may refer the terms of a licensing scheme to the Copyright Tribunal. The Tribunal has the potential to provide some oversight of the fee that copyright holders jointly require persons to pay. 25 Docsity.com Protection against collective actions • However, the Tribunal's jurisdiction is limited. It has no role to play in deciding whether an aggregation of competitors is justified as a means of setting a fee in the first place. Neither has it a role in determining whether the fee should be set through the process of copyright holders competing amongst each other on license fees. Likewise, there is no role for the Tribunal to place conditions on how the aggregation of competitors operates in collecting the fees. 26 Docsity.com A general Competition Law is needed • Regarding this kind of problems, the Hong Kong Consumer Council's position is that a general competition law should be put in place that would make any aggregation of competitors, including copyright holders, more open and accountable. Such a law, with exemption process, should expose to scrutiny any claimed public benefits arising from the aggregation. • This would guard against copyright owners and owners of any rights exercising collectively their market power. 27 Docsity.com