The purpose of this Bill is to improve the protection given to the consumer in existing legislation such as the Merchandise Marks Act, 1887. Even though this measure was supplemented and revised in 1931 and 1970, its basic provisions are still related to a time when prepacking of goods was rare and advertising did not have its present day scope or impact and there was no radio or television. The need for updating these provisions has been recognised for quite some time and the first step was taken in the Act of 1970 which provided for compulsory quantity marking on prepacked goods. In 1972, the National Prices Commission were asked to examine the legislative needs in this area, and this task was taken over by the National Consumer Advisory Council when it was set up in 1973.
The council made recommendations to the Minister which were published in 1975, and comments and views on these have been taken into account in preparing the Bill. The council's recommendations dealt with the subject under four separate headings and the present Bill is related to the first heading only, that is, Deceptive Trade Practices. A second measure, published in May 1977, deals with contract terms, guarantees, warranties and so forth, that is, the field covered by the Sale of Goods Act, 1893. This is being examined with a view to early introduction in Dáil Éireann, and work on further measures, in particular a Consumer Credit Bill, is well advanced.
This Bill might be said to deal with all forms of information about goods and services given to consumers, whether by printing on packs, notices in shops, brochures, leaflets, or by radio or television advertising. Its provisions are intended to ensure that all such information is neither false nor misleading, and also that essential information will not be withheld.
The notion of a "trade description", introduced in the 1887 Act, was of a statement about goods which, on pain of prosecution, must be true. Only statements about quantity, composition and origin were comprehended by the Act of 1887, so that while it was an offence to make an untrue statement about, for instance, the weight of an article, or where it came from, it was not an offence to claim falsely that it complied with a particular standard. The new Bill will remedy this by bringing within the concept of trade description virtually all kinds of statements about goods which might influence a purchaser. Trade descriptions will now comprehend statements about such matters as processing or reconditioning, fitness for purpose, compliance with a standard or test, and the standing or commercial importance of the supplier or manufacturer. A further gap is to be closed by prohibiting misleading as well as actually false statements.
Also, while the 1887 trade description had to be physically on, with or near the goods, this Bill provides that information given by word of mouth or contained in an advertisement or in fact given in any way may be a trade description and subject to the same requirements of truth and accuracy as if it were physically attached to the goods.
One of the most controversial areas in recent years has been in the field of price indications and comparisons. These may be implied or direct comparisons with former prices, normal prices, the price elsewhere, and so on. The Bill makes it an offence to give a false or misleading indication as to the price at which goods or services are being offered or have been offered in the past, or of the price for which they can be obtained elsewhere, or of the recommended price or the full price which will have to be paid. I hope this will remedy the confusion and annoyance so often caused by the "4p off" phenomenon.
Another provision which I might particularly mention is the power the Bill would give to the Director of Consumer Affairs to seek an Order in the High Court prohibiting the continued publication of a particular advertisement. The council recommended explicitly that the Court should be empowered to ban an advertisement which is the subject of a complaint. After very careful consideration, I have concluded that the inclusion of such a provision is called for. What the Bill in general provides for is penalties for a variety of breaches of the law after these breaches have occurred, and while it is true to say that the fear of these penalties is a powerful reason why the breaches should not occur in the first place, this reasoning cannot always be relied on. I could not accept the position that a series of seriously misleading advertisements should continue to run with no power to stop them other than the threat that at some future date the person responsible would be prosecuted.
The provision as originally drafted would have given power to any person to seek an injunction of this kind. While this would be the most effective way of doing it, I found that it would be too readily open to abuse. Under such a provision it would be possible for a trader to stop his competitors' advertisements or delay them in such a way as to render them useless. I considered the possibility of avoiding this difficulty by requiring the director's consent for applications to the Court, but I am advised that such an arrangement is not practicable for several reasons. Accordingly, the power has to be confined to the director, but clearly it is open to any person to approach the director and ask him to take action about an advertisement which is likely to mislead and cause loss, damage or injury.
It has been suggested that this kind of measure, preventing misleading information, is not much help to a person who has been misled and has suffered loss or damage as a result. Even when the culprit has been punished, the victim goes unrecompensed. This is true, and, to provide for such a situation the Bill now provides, at section 17 for redress for such victims. The provision is very restricted; it is limited to the amount of the fine, and to claimants who have applied before the case is heard and who are called as witnesses. It was not possible to allow of any wider scope for compensation here because of legal complications but I think even this restricted provision will do a good deal for victims of any offence under the Act. I will continue to look for improved mechanisms of redress.
A further important feature of the Bill is the power to make orders requiring that specified information be included in advertisements in the interests of the consumer. This is necessary for cases where the omission of some essential information in an advertisement could make it misleading. Because words or expressions of imprecise meaning which yet carry a suggestion of real or intrinsic value and worth are often used with little or no justification in relation to products, the Minister is also empowered to assign by order particular meanings to expressions commonly used in relation to goods and services to ensure that consumers are not misled by deceptive or vague descriptions. Similarly, he may require by order that certain goods be marked with or accompanied by specified information or instructions where he feels that this is necessary in the consumers' interest. The power of making orders which is conferred on the Minister is subject to his giving notice of the making of the order and consulting with interested parties. Furthermore, the approval of the draft order by both Houses of the Oireachtas is necessary.
Possibly the greatest single deficiency of the Merchandise Marks Acts is that they relate only to goods and make no provision for protecting the consumer against the dishonest advertising or promotion of services. Consumers can be misled about services in the same way as with goods; they are, if anything, even more dependent on the supplier's descriptions and representations. The Bill, accordingly, prohibits false and misleading statements relating to services, facilities and accommodation. The relevant section necessarily differs in detail from those dealing with descriptions of goods but the general aim is to apply the same rules,mutatis mutandis, to statements by advertisement or otherwise, about services as about goods.
The whole area of consumer protection is noticeable for continual development of new areas of study and demands for public regulation. This arises from the dynamic character of marketing and product development which, however, described from the point of view of business, contain the possibility of new forms of manipulation to which the consumer may not be alert. Possible economic loss or damage to the consumer should be under surveillance and capable of being influenced as much asex post facto sanctions for damage or loss caused.
To help to rectify this possible danger, I propose to create with this Bill the office of Director of Consumer Affairs who would be charged with the responsibility for keeping developments in trade descriptions and advertising under review in the interests of the consumer, requesting the cessation of prejudicial practices, seeking injunctions where necessary and promoting the adoption of codes of good practice by business groups. The Bill also provides for officers to be authorised by the Minister for Industry, Commerce and Energy to enforce the provisions of this Bill, generally, and to assist the director.
There are probably goods on the shelves or in the stores of distributors which were bought by them in good faith, but which might be held, on a strict interpretation of the new provisions, not to measure up fully to the requirements. I think it would be harsh to leave distributors at a loss in relation to such goods, which they accepted as freely circulating on the market, and I feel it would be reasonable to allow a short period to adjust to the new requirements. I will be open to suggestions on this point.
Finally, the Bill does seek to restore a balance which has tilted somewhat against the consumer. I emphasise however, that it also protects honest traders from their less scrupulous competitors. It provides adequate defences for mistake, accident and so forth and makes special provision for those who merely publish advertisements, where this is the business they are in.
This Bill is part of a general policy of consumer protection which could be said to contain three basic elements: ensuring that the consumer gets truthful information; ensuring that the consumer gets more, and more relevant information; strengthening the consumer's position in the market place.
The first two elements are contained in this Bill and in recent improvements in price display provisions. The third element is dealt with in the second measure I mentioned earlier which was published in May last, and will modernise the Sale of Goods Act, cover services as well as goods, and also in the new measure being prepared dealing with consumer credit. The overall objective of the policy is to enable the consumer to play a more equal and effective role with the producer and distributor, in an expanding competitive economy.