Consumer Theories of Harm: An Economic Approach to Consumer Law Enforcement and Policy Making

Description

It has long been thought that fairness in European Consumer Law would be achieved by relying on information as a remedy and expecting the average consumer to keep businesses in check by voting with their feet. This monograph argues that the way consumer law operates today promises a lot but does not deliver enough. It struggles to avoid harm being caused to consumers and it struggles to repair the harm after the event. To achieve fairness, solutions need to be found elsewhere. Consumer Theories of Harm offers an alternative model to assess where and how consumer detriment may occur and suggests solutions to prevent it. It shows that a more confident use of economic theory will allow practitioners to demonstrate how a poor standard of professional diligence lies at the heart of consumer harm. The book provides both theoretical and practical examples of how to combine existing law with economic theory to improve case outcomes. It also shows how public enforcers can move beyond the dominant transparency paradigm to an approach where firms have a positive duty to treat consumers fairly and to shape their commercial offers in a way that prevents consumers from making mistakes. Over time, this ‘fairness-by-design’ approach will emerge as the only acceptable way to compete. Preface Table of Contents List of Abbreviations List of Figures and Tables Table of Cases Table of Legislation 1. Introduction I. The Search for Fairness II. Origins of Theories of Harm in Competition Law III. Using Theories of Harm in Consumer Law - A Natural Evolution IV. Harnessing the Use of Economics in Consumer Law V. Contents 2. The Limitations of Consumer Law in Tackling Consumer Harm I. Introduction II. Limitations in the Use of Information as a Mainstream Transparency Approach III. Limitations of the Definition of the 'Average Consumer' Used as a Reference Point for Protection IV. Implementation of the 'Average Consumer' Standard under the Unfair Commercial Practices Legislation V. Protecting 'Vulnerable' and 'Disengaged' Consumers VI. Limitations Found in Unfair Terms Legislation VII. The Enforcement Framework in the UK 3. The Limitations of Competition Law in Tackling Consumer Harm I. Introduction II. Ex-Post Enforcement against Exploitative Abuses III. The Case for a Holistic Approach under an Ex Ante Administrative Market Regime IV. The Enforcement Framework in the UK 4. The Economic Framework Underpinning Consumer Theories of Harm I. Introduction II. Consumer Surplus III. The Economic Case for Intervention in Consumer Markets IV. Concluding Remarks 5. Archetypal Consumer Theories of Harm I. Introduction II. The Scam III. The Lemon IV. The Shock V. The Subsidy VI. Concluding Remarks 6. Applying CToHs - Case Studies I. Case Study on the CMA Market Inquiry into Retail Energy II. Case Study on Bank Current Accounts and Savings Accounts III. Case Study on Claims for Compensation in the Airline Industry IV. Case Study on Allocated Airline Seating V. Case Study on Fertility Add-Ons 7. Fairness by Design: The Introduction of a Positive Duty to Trade Fairly I. Introduction II. Justifications for Adopting a More Prescriptive Standard of Conduct for the Protection of Consumers III. Introducing a Positive Duty to Trade Fairly IV. The Impact of a General and Positive Duty to Trade Fairly V. Conclusion Bibliography Index