Select Committee on Enterprise and Economic Strategy díospóireacht -
Thursday, 28 Jul 1994

SECTION 79.

Mr. R. Bruton

I move amendment No. 188:

In page 44, subsection (2), line 22, after "taxes" to insert "and shall state the APR in relation to the hire terms offered".

This amendment is seeking that APRs be stated in advertisements for consumer hire agreements. I presumed that this would be built into such advertisements. Perhaps the legislation is redundant in that there is a presumption that this would be done. However, if an effective rate of interest is being charged between the cash price, which is stated, and the hire purchase price, which is also stated, we should convert it into an APR so that people can compare it with other types of available credit.

Mr. M. McDowell

In theory, that sounds right but in practice how does one determine the APR in a three year television rental agreement, unless one calculates the value of the goods and deems it to be sale, because in the end it is just a service? If one rents a second hand television how is the APR of that transaction determined? How much they would sell it for? They would say that they would never sell it and that one would never buy it either. It is not like a hire purchase agreement.

Mrs. O'Rourke

The Deputy is right. This echoes what we have just been talking about with regard to capping liability in the difference between a hire purchase and a consumer hire. However, of course, it is much stronger here. Throughout Part VII, the term APR does not come into consumer hire arrangements because how would one arrive at it?

Amendment, by leave, withdrawn.

Mrs. O'Rourke

I move amendment No. 189:

In page 44, between lines 27 and 28, to insert the following subsection:

"(4) A person shall not display or publish or cause to be displayed or published an advertisement to which this section applies which does not comply with the section.".

This amendment is straightforward. It raises the offence proposed in section 12, amendment No. 78, which we adopted.

Mr. M. McDowell

I would not like the publisher of a newspaper to be liable for carrying an advertisement. They have enough to do without rooting through advertisements to see whether they are committing offences.

Mrs. O'Rourke

We had discussions about that.

Mr. M. McDowell

The Minister should add some sort of exclusion clause for newspaper proprietors and people publishing innocently because it is a bit unfair to cast on the Irish Independentthe obligation to hunt through the advertisements.

Mrs. O'Rourke

They already do quite an amount of that in regard to misleading advertising and so on.

Mr. M. McDowell

I agree with the Minister that they do as does the Advertising Standards Authority and so on. However, this is somewhat unfair because the purpose of this subsection is to create a criminal offence. It is a bit harsh because it is quite complicated to understand.

Mrs. O'Rourke

We discussed that. It was brought to our attention, not by newspapers but in general discussion — I cannot remember with whom, perhaps with the consumers association.

Mr. M. McDowell

Could the Minister table an amendment on Report Stage to the effect that it would be a defence to a prosecution under that subsection?

Mrs. O'Rourke

I will think about it. I think that newspapers should be responsible for——

Mr. M. McDowell

However, prosecution is a bit much. We live in a liberal society.

Mrs. O'Rourke

Yes, but the power of the written word and the——

Mr. M. McDowell

I accept that it is desirable. For example, if a large electrical retailer takes a whole page advertisement——

Mrs. O'Rourke

Which they are doing at the moment.

Mr. M. McDowell

If they are offering televisions for hire, that should be included in the advertisement. However, to say to newspapers such as the Independent group or a small provincial newspaper that they have committed an offence——

Chairman

The Deputy should refrain from naming a newspaper lest he be accused of having a vested interest or a conflict of interest. I believe his brother is a columnist with the newspaper.

Mr. M. McDowell

I write the odd article myself but that is double jobbing.

Mrs. O'Rourke

It may be suitable under section 27 (4) of the Bill.

Mr. M. McDowell

Yes, something like that would be ideal.

Mrs. O'Rourke

We had quite a vivid debate on that. I can see the rights and wrongs of it.

Mr. M. McDowell

We could reinsert it somewhere in that subsection.

Amendment agreed to.

Section 79, as amended, agreed to.

NEW SECTION.

Mrs. O'Rourke

I move amendment No. 190:

In page 44, before section 80, but in Part VII, to insert the following new section:

"Hirer to take reasonable care of goods.

80.—A hirer shall take all reasonable care of goods which are let to him under a consumer hire agreement and shall be liable to the owner if he fails to take such care.".

We consulted with the Attorney General on this. It was agreed that similar provision should apply in relation to the responsibility of the consumer to take care of the goods which are subject to a consumer hire agreement as exists in relation to a hire purchase agreement. The difference between a hire agreement and a hire purchase agreement is that the goods remain at all times the property of the hirer and must be returned in due course at the end of the hire period.

Therefore, there are essential differences between the provision in section 62 regarding the liability of the hirer in a hire purchase agreement and the liability in relation to a hire agreement. In the hire purchase agreement, as the goods will eventually become the property of the consumer, any damage to them will be the consumer's own liability. The provisions of liability to the owner apply only to the situation in which an agreement is terminated in accordance with section 61. In this proposal, because the goods are the property of the owner, the onus to take all reasonable care rests with the hirer.

Mr. R. Bruton

This undermines the argument which the Minister offered tentatively earlier of why we would not have a formula for capping liability because we now clearly make the consumer liable for any damage to the goods. It strengthens the case for coming back on Report Stage.

Mrs. O'Rourke

The extensive liability one and not the APR one?

Mr. R. Bruton

Not the APR one.

Amendment agreed to.