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Conferences and Training
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The 2001 was held at the Motor Cycle Museum, Birmingham. This regular annual conference, chaired by David Evans, RMIF Chief Executive, attracts not only lawyers and company secretaries from the industry, but also those involved in customer relations, commercial managers, and those who advise the industry.

To purchase a set of full conference papers (£50.00), or to ensure that you are put on our mailing list to receive booking details for next year’s conference contact us.

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Topics covered in 2001

UK motor industry must seize block exemption initiative

The UK motor industry has a short breathing space in which to submit new, viable proposals for changes to Europe’s car distribution and servicing rules.

Failure to put forward alternatives in the run up to the European Commission proposals for reform – which are only now expected to emerge this autumn – could, by default, mean wholesale removal of current selective marketing arrangements under block exemption.

So warned Malcolm Harbour MEP, a member of the European Parliament’s Legal Affairs and Internal Market Committee.

Speaking at the Motor Law Conference 2001 in Birmingham on February 21, Mr Harbour said that there were currently two routes open to legislators – a light legislative route, or the block exemption-savaging “nuclear option”.

“The light legislation route would involved the development of a set of guidelines which would actually define what was legal and what wasn’t. The Commission would only get involved to sort out the major abuses – with the day to day enforcement dealt with at a national level.”

The option would involve an element of self-regulation. The day to day operations of dealers and manufacturers would be governed by a set of business principles contained in a code of conduct.

With that route, and with those regulatory measures, the key elements of block exemption could be retained while giving dealers the freedom to exploit extra territory – and supply resellers. Such an approach might also involve development of separate sales and service franchises and the allocation of “full format” franchises. The option might also give the green light to further vertical integration by the manufacturers.

“But there is also the heavy legislative route, what I call the nuclear option. The UK Government – which is the only party pressing for radical change – may say that the market dominance of car makers has to be broken. They make argue that they will have to be forced to change via legislative changes. This would be targeted at letting any reseller participate, and will introduce pricing rules to open up volume discounts.”

Without any commitment to the heavy legislative route by other EU countries, he warned that the UK Government may act independently.

He said that the price differential issue was the key issue driving the UK Government’s radical stance on reform – and once this issue was squeezed out of the discussions, the reform debate would become more “rational”.

He made a thinly veiled criticism of the UK industry’s lobbying efforts over the issue – stating that other EU Governments weren’t pressing for change because the dealers in their countries had “articulately and effectively” got across their views.”

He said the UK industry needed to reposition itself – to show that it is ready for new ideas and that its not “entrenching” itself in opposition to change without offering alternatives.

“Our dealers and manufacturers should be coming forward with their own ideas. From my perspective, the more interesting and challenging proposals we get to achieve the end result, the better. To develop a system which, in the long term, is good for the consumer, good for the industry, and good for the European Union.”

Life after block exemption

After the keynote speech by Malcolm Harbour, the Conference, chaired by David Evans Chief Executive of the Retail Motor Industry Federation, went on to consider the legal pros and cons of possible alternatives to the existing system of dealer agreements. Leading competition law barrister Nicholas Paines QC and Guy Lougher of Wragge & Co. discussed the various options and outlined the legal considerations that applied in each case. Vertical integration (where the manufacturer owns sales outlets directly) and dealers being appointed to act as agents in law were explored in relation to general issues of consumer law, employment law, the law on commercial agents, and competition law, followed by an analysis in more detail of the effect of the EC regulation on vertical agreements.

Consumer issues considered

Attention then turned to a number of customer relations issues. Adrian Watts, a member of the SMMT Legal Committee analysed the government’s proposals on the implementation of the EC Directive on Consumer Guarantees, (see below for a fuller report), and urged delegates to take advantage of the opportunity to comment before the deadline of 2 April. Barbara Habberjam of the Consumer Affairs Directorate at the DTI generated a number of questions as she explained the background to the recent critical Office of Fair Trading Report on vehicle servicing and repair. She explained how the Task Force set up by the Government to make recommendations is working. This is due to report with an agenda for action by April this year. Two possible areas being considered for inclusion in the report are recommendations on good garage schemes, and on training.

Legal pitfalls of selling over the Internet

The first afternoon session after lunch was enlivened by a role play with Christopher Jackson of Mazda Cars UK Ltd taking the role of client, and Peter Crockford of Dechert Solicitors as his adviser steering him through the various legal problems associated with selling cars on the Internet. The different types of website, and legal issues associated with each were considered both from the point of view of the manufacturer/dealer relationship if manufacturers sell direct, and from the point of view of consumer protection and the recent distance selling regulations.

Data protection and the motor industry

Lorraine Godkin, a Compliance Manager at the office of the Information Commissioner (formerly the Data Protection Commissioner) gave a lively and thought provoking presentation on some aspects of the new data protection rules that affect the industry, in particular the extension of controls to manual records, the giving of consent to processing of data, and the rules on cold calling.

Developments in designs law

The day was concluded with a review by Peter Groves of the Government’s proposals on how the EC Directive on the Protection of Designs will be implemented (see the report elsewhere in this issue for more details).

Papers from the conference are available for purchase for £50
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