Ontario Consumer Protection Act, 2002 and draft regulations

PIAC’s comments on the new Ontario Consumer Protection Act, 2002 and draft regulations

Consumers Council of Canada seeks input from Canadians

PIN: Public Interest Network: The Policy Development Network of the Consumers Council of Canada
PIN is an electronic Public Interest Network for policy development. It will be a database of some 500 thought leaders, selected across a wide range of sectors and categories, whose input on consumer policy matters can be solicited regularly, initially through on-line polling / surveys, and later possibly through on-line secure discussions. PIN members will be polled electronically on behalf of paying clients to gather input on policy matters affecting Canadian consumers.
The objectives of PIN are:

To provide a tool by which government, the private sector and other consumer groups can access critical thinking on any consumer issue.
To enhance the ability of Canadian consumers (thought leaders) to participate in the development of public and other sector policy priorities.

Become a Canadian consumer thought leader! Join PIN
www.consumerscouncil.com

Consumers International statement to World Summit on the Information Society

Consumers International statement to World Summit on the Information Society March 2003
Link to WSIS
Link to Consumers International

PIAC Comments on Spam

Industry Canada Discussion Paper:E-mail Marketing: Consumer Choices and Business Opportunities

Comments of the Public Interest Advocacy Centre

This document is also available as a PDF [pdf file: 0.12mb]
The following comments are provided by the Public Interest Advocacy Centre (PIAC) on the Discussion Paper issued by Industry Canada in January 2003 on the issue of unsolicited commercial electronic mail (“spam”).
The Public Interest Advocacy Centre is a national non-profit organization devoted to the representation of consumer interests in matters involving public utilities, essential services, and public interest issues of broad application to Canadians. PIAC has developed a strong record of consumer advocacy since its inception in 1976, and is widely recognized as an important and influential voice for ordinary consumers in a variety of marketplace issues. PIAC is governed by a distinguished volunteer Board of Directors from across the country, and is supported by member groups and donors representing hundreds of thousands of Canadians.

The Problem of Spam

As Industry Canada’s discussion paper recognizes, unsolicited commercial email is becoming a serious problem for online consumers, and thus a serious hindrance to the further growth of this medium of communication and commerce. There have been many studies, reports, and estimates of the extent of the problem. For example:

One research company estimates that 2.3 billion spam messages are now broadcast daily over the Internet, and that this will rise to 15 billion in 2006;1
Another company reports that 32% of the 7.3 billion e-mail messages sent each day are spam;2
As of March 2003, it is estimated that roughly 40% of all e-mail traffic in the
U.S. is spam, up from 8% in late 2001 (citing Brightmail Inc., anti-spam software vendor)3 and 12-15% in 2002;4
In the UK, its was estimated that 40% of emails received by computer users in December 2002 were spam5; another survey in February 2003 estimated that 25% of e-mail was spam (MessageLabs survey);6

ISPs estimate that the quantity of spam rose by more than 500% between September 2002 and March 2003;7 AOL’s spam filters block 1 billion messages daily8, or an average of 24 junk e-mails per account per day;9

On 5 March 2003, AOL said it blocked a billion e-mails offering mortgages and organ enhancements;10

If 1% of the 24 million small businesses in the U.S. sent an e-mail subscriber one e-mail a year, it would result in 657 messages in the subscriber’s in-box every day;11

Type of spam sent:

18% pornographic or sex sites
33% products (inexpensive ink cartridges, etc.)
24% financial offers (“low-cost” loans)
5% scams/fraud 20% other12

Clearly, the problem is significant and shows no sign of abating, despite efforts, both technological and legal, to control it.

The Costs of Spam

While cheap for the marketers who use it, spam is also proving costly to the economy, as well as to individual consumers.
In the U.S., e-mail marketing is a $1.4 billion industry (citing Jupiter Research);13
Collecting addresses to spam is relatively inexpensive: $150 for a CD with millions of addresses;14
e-mail software is being sold online that will extract e-mail addresses from websites; prices range from $19.95 to $89.60;
an e-mail costs a fraction of a cent to send;15

Yet,

Spam costs are largely born by recipients, both directly and as customers of ISPs who are forced to spend money fighting it (in contrast to other media of communication such as television, radio and print, where advertising revenues support the media itself);
Inmarsat-C cell phone holders pay US$6 to receive a 1000-character e-mail, with one-minute connection costs of US$2 – mail cannot be deleted unless it is received;16
Brightmail, an anti-spamming company, sells its services for $5-$15 per user per year;17
In August 2002, Computer Mail Services, a technology company, projected that a company whose 500 employees each receives 5 junk e-mails a day and uses 10 seconds to delete each one, can expect to lose $40,000/year in wasted salaries, and 105 days in lost productivity;18
San Francisco consulting firm Ferris Research Inc. estimates that spam will cost U.S. organizations more than $10 billion in 2003, due to lost productivity, additional equipment, software and staff time needed to address the problem;19

It estimated that unwanted commercial e-mail cost

U.S. corporations $8.9 billion in 2002;20 Close to $1 billion in Canada;21

Approaches to Controlling Spam

ISPs, regulators, consumers and entrepreneurs have been struggling with the problem of spam for some time. Many different approaches to controlling spam have emerged: technological options, self-regulatory codes, standards development and legal requirements. Those closest to the problem seem to agree that the solution will require action on all fronts: technology, self-regulation, standards development, and law.22
(a) Technological options
The market has produced an array of constantly-evolving filtering and blocking services, now widely used by ISPs as well as individual e-mail users. Different methods of filtering are used, including blacklists of known spammers’ Internet addresses. Companies such as Brightmail Inc. who specialize in anti-spam software are finding a growing market for their services. While these filtering services help to reduce the costly impact of spam on ISPs and users, however, they do not appear to be stopping spammers from engaging in the practice in the first place.
Non-governmental organizations such as the US-based Internet Research Task Force’s recently inaugurated “Anti-Spam Research Group”, are attempting to develop technological means to better control spam. The group’s Charter focuses on the need to allow for “consent-based communication”, under which “an individual or organization should be able to express consent or lack of consent for certain communication and have the architecture support those desires.”23 The Chair of this group noted that technical and legal solutions must work hand in hand.24
Another group recently formed in the USA, “JamSpam”, was created “to produce an open interoperable antispam specification that serves as a universal solution to both edges of the spam sword”.25 Some options being considered include developing e-mail authentication standards to ensure that legitimate messages are recognized and delivered securely, closing “open relays” – insecure servers used by spammers to send bulk e-mail, and creating more transparency for legitimate messages, so as for example to be able to discern whether the message is a newsletter, a bill, or a message from a friend.26
(b) Policy and self-regulatory approaches
There are hundreds, if not thousands, of mailing lists, message boards and anti-spam organizations battling the problem of junk e-mail.
ISPs deal with spam in a variety of ways, including automatic filtering technologies, as well as customer-controlled filtering services. Microsoft recently announced that its MSN Hotmail subscribers would be limited to sending only 100 messages per day, “in an effort to prevent spammers from using Hotmail to spread spam”.27 Prior to this, Microsoft relied on filtering technology: it filtered all messages twice, first through its e-mail servers and then at the subscriber end, based on the subscriber’s own designation of previous messages as junk.28
In January 2003 AT&T WorldNet unsuccessfully tried to use a “reverse DNS lookup” to block spam: ISP servers were programmed to relate incoming e-mail’s originating address to a valid domain name or Web address by looking it up in a DNS database; if not there, the message was dropped. This approach failed, however, as too many legitimate e-mails were dropped.29
In addition to spam filtering and acting on subscriber complaints, AOL tracks the volume of e-mail in its system, and terminates AOL subscribers who have unusually high volumes of outgoing mail.30
ISPs such as Yahoo and Microsoft have also changed their registration processes so as to make it more difficult for spammers to automate the process of creating new free e-mail accounts.
Associations of Direct Marketers are also trying to control their members’ behaviour online. But even effective self-regulation by such bodies is ineffective insofar as spammers are not members of the organization.
(c) Legislation
In the USA, Microsoft, AOL, Verizon, Earthlink and other ISPs are aggressively pushing for national legislation. Even marketers, who generally oppose more regulation, now support the drive for national legislation, if only to avoid a patchwork of state regulations that vary in strength and approach: in October 2002, the American Direct Marketing Association announced that it supported federal anti-spam legislation that would ban false headers.31
The following approaches are either being taken in other jurisdictions, or are being considered, currently:
(i) Regulate Spammers

prohibit unsolicited commercial email without explicit, prior, opt-in consent from the recipient;32
require labeling of all unsolicited commercial email as such;33
require standardized labeling of all unsolicited commercial email (e.g., “ADV” in the subject line of the email);34
require electronic marketers to filter out addresses maintained in a central database of users who register their wish not to receive any unsolicited commercial email (similar to telemarketing “Do Not Call” lists);35
require valid, active e-mail address of sender to be displayed on all messages;36
require conspicuous, easy, effective opt-out of further mailings by recipients;37
prohibit the sending of messages to those who have requested to be removed from the sender’s list;38
prohibit transmission of large quantities of advertising email using randomly chosen addresses;39
prohibit the harvesting of e-mail addresses from the Internet;
prohibit falsified or forged routing and transmission information, as well as the sale of software designed to permit such falsification or forgery;40

(ii) Regulate ISPs

require the licensing of all ISPs, and make a condition of license the blocking of spam41
prohibit ISPs from selling or trading subscriber e-mail addresses to marketers;

(ii) Regulate Businesses who use e-mail lists compiled by others

prohibit the use by marketers of e-mail addresses without documented proof of addressee’s consent to receive unsolicited commercial e-mail;

(iii) Empower E-mail users and ISPs to enforce law and obtain redress

Provide users and ISPs with the right to sue spammers for specified damages per unsolicited e-mail received in violation of the law;42

PIAC Position
As others have noted, spam is a serious problem in need of a multi-faceted and coordinated response. Neither technological nor legal approaches alone will suffice; both are needed.
Legal initiatives are needed both to further encourage the development of technological “fixes” and to deter spammers. Even where enforcement of laws is difficult, it is important to establish ground-rules for online marketers, so that the limits of acceptability are clear, and so that enforcement can proceed where possible.
PIAC advocates an internationally-coordinated approach which includes:

prohibition of all unsolicited commercial e-mail without prior, explicit consent from the recipient or contrary to the recipient’s expressed wishes; * Alternatively, establishment of a national “Do Not Send” database, in which e-mail users can register their desire not to receive any unsolicited e-mail, and which all e-mail marketers are required to respect; AND prohibition of the sending of unsolicited commercial e-mail to such addresses;
a standardized labeling requirement for all advertising e-mail;
inclusion, at the top of each commercial message, of a simple method by which recipients can opt-out of any future mailings;
specific prohibition of false, misleading, or invalid information in e-mail messages, as well as disguised paths of transmission;
specific prohibition of software products used to harvest e-mail addresses from the Internet, to falsify return addresses, or to disguise transmission paths;
significant penalties for violation of the law (e.g., $25 per illegal e-mail message); and
statutory provision for civil suits by e-mail users and ISPs against spammers.

Only with a set of meaningful rights and obligations such as those above will e-mail users and service providers be properly equipped to control spam.
Contact: Philippa Lawson Senior Counsel Public Interest Advocacy Centre 1204 – 1 Nicholas St. Ottawa, Ontario K1N 7B7 tel: (613)562-4002 x.24 fax: (613) 562-0007 email:plawson@piac.ca
http://www.piac.ca
1 “States Still Trying to Stop Spam” Wired News (7 February 2003) http://www.wired.com/news/print/0,1294,57585,000.html
2 Ira Teinowitz, “FTC to Hold Spam Workshop: Three-Day Hearings Could Lead to Reglatory Action” online: ADAGE.com news (3 February 2003).
3 Jonathan Krim, “Spam’s Cost To Business Escalates: Bulk E-Mail Threatens Communication Arteries” Washington Post (13 March 2003)
4 Jennifer Lee “Spam: An Esclating Attack of the Clones” The New York Times on the Web (27 June 2002).
5 Claire Cozens,, “ASA clamps down on spam” The Guardian online: The Guardian http://www.guardian.co.uk/Print/0,3858,47617533,00.html
6 “Spam comprises nearly quarter of email” online: SMH.com.au (11 February 2003).
7 Stefanie Olsen, “Hotmail restricts outgoing messages”, CNET News.com (24 March 2003).
8 Ibid.
9 AP “AOL Claims Record Block of Spam E-Mails” The Washington Post (5 March 2003) online: Washington Post http://www.washingtonpost.com/ac2/wp-dyn/A47523-2003Mar5?language=printer
10 Ibid.
11 Jonathan Krim, op cit
12 Neil McIntosh, , “Mail out of order” The Guardian 27 February 2003)
13 Jonathan Krim, op cit
14 James Love, “Taking on Junk E-Mail” online: Consumer Project on Technology http://www.cptech.org
15 Ibid.
16 Herwig Feichtinger e-mail (18 May 2000), on CAUCE website http://www.cauce.org/tales/retrieve_mail.shtml
17 Neil McIntosh, op cit.
18 E-mail “The High Price of Spam” (1 March 2002; printed 3 August 2002).
19 Ibid.
20 Brian Morrissey “Spam Cost Corporat eAmerican $9B in 2002” online: Juperiterresearch http://cyberatlas.Internet.com/big_picture/applications/print/0,,1301_1565721,00.html
21 http://webmania.ctv.ca/w2003jan17.htm
22 See Stefanie Olsen, “Tech Firms tackle spam”, CNET News.com (14 March 2003); and WIRED NEWS, “Net Gurus Rally Anti-Spam Forces”, 01 March 2003.
23 WIRED NEWS, “Net Gurus Rally Anti-Spam Forces”, 01 March 2003.
24 Ibid.
25 Stefanie Olsen, “Tech Firms tackle spam”, CNET News.com (14 March 2003).
26 Ibid.
27 Stephanie Olsen, op cit.
28 Microsoft “Spiking The Spammers” (12 February 2003) online: Microsoft on the Issues http://www.microsoft.com/issues/essays/2003/02-12spam.asp
29 Stefanie Olsen, “AT&T spam filter loses valid e-mail” online: CNET (24 January 2003) http://news.com.com/2102-1023-982118.html
30 Ibid.
31 Jonathan Krim, op cit.; Ken Magill, “Minnesota Anti-Spam Law Takes Effect, Texas Introduces Bill” DMNews (4 March 2003)
32 E.g., Delaware; France; UK, EU (to become effective end of 2003), Korea (impending)
33 E.g., UK (ASA), California
34 E.g., Minnesota, Washington, Korea,
35 “States Still Trying to Stop Spam” Wired News (7 February 2003)
36 E.g., Japan, Minnesota, Virginia, Washington
37 E.g., Arizona, California,
38 E.g., Japan, Arizona, Minnesota, Ohio,
39 E.g., Japan
40 E.g., Virginia, Washington.
41 Proposed by an M.P. in the U.K.: Neil McIntosh, op cit.
42 E.g., Minnesota, Ohio, Texas, Utah, Virginia, Washington

Comments on proposed rules for jurisdiction in cross-border transactions

Consumer Measures Committee
c/o David Clarke
Office of Consumer Affairs
Industry Canada
Room 911A, CD Howe Bldg
235 Queen St.
Ottawa, Ont. K1A 0H5
Dear Mr. Clarke:
Comments on “The Determination of Jurisdiction in Cross-border Business-to-Consumer Transactions”
Thank you for the opportunity to comment on this important issue, as set out in the above-titled consultation paper. PIAC is a federally incorporated non-profit organization with members and clients from across the country. PIAC has been representing the residential consumer interest in marketplace issues for over 25 years. We have been particularly involved in consumer protection issues arising from the emerging online marketplace, both nationally and internationally. In particular, we have been actively involved, on behalf of Consumers International as well as ourselves, in the Hague Conference negotiations to complete an international Convention on Jurisdiction in cross-border commercial transactions.
PIAC’s position statement of February 2001 on the preliminary draft Hague Convention is attached, and is also posted on the PIAC website at http://www.piac.ca. Also attached is the Consumers International position statement on point.
We have reviewed the consultation paper and offer the following comments.

General

The proposed rules constitute an appropriate basis for a workable regime for determining applicable law and forum in cross-border litigation between consumers and businesses – one that strikes a fair balance between the interests of consumers and businesses. However, they fail to provide adequate certainty in the case of online merchants who take no steps to limit the jurisdictions in which they contract with consumers. Such certainty can and should be achieved through amendments that clearly place the onus on online businesses to take reasonable measures to limit the jurisdictions in which they conduct transactions, if they wish to limit their exposure to certain legal systems.

Underlying Principles

It is important that any rules regarding jurisdiction reflect the reality that consumers (both offline and online) suffer from tremendous information asymmetries and unequal bargaining power vis-à-vis sellers. It would be unrealistic and unfair, for example, to establish rules based on the presumption that ordinary consumers read, appreciate, and agree to contractual clauses specifying applicable forum and law in the case of disputes, every time they transact with businesses. In fact, consumers have no choice in the matter, as they are presented with non-negotiated “take it or leave it” terms of contract, drafted by the business in the business’s self-interest. For this reason, it is essential that rules be established to limit the ability of businesses to restrict by contract consumer rights to legal redress.
It is also important to recognize the asymmetries between consumers and businesses in terms of financial ability and incentive to pursue cross-border litigation. As repeat players, businesses have a strong incentive and financial interest in pursuing cross-border litigation with consumers in order to ensure favourable precedents, or to avoid unfavourable precedents. On the other hand, individual consumers rarely have the time, energy or financial resources to pursue litigation, even where they have a strong case and even where the dispute is within their own jurisdiction. If legal redress is to be made available to ordinary consumers in any practical sense, it must be available via their own courts. Similarly, if consumer protection laws are to be effective, they must be available to consumers who transact from within the jurisdiction in question.
Choice of forum and choice of law clauses in consumer contracts, which clauses have the effect of limiting the consumer’s right to redress, should never be enforceable. Like other “fine print” in standard form contracts, such clauses are invariably imposed on unwitting consumers. They are not the result of conscious negotiation between two relatively equal parties. The only “choice” involved in such clauses is that of the business. No one, least of all the business using such clauses, expects the ordinary consumer to address her mind to such clauses at the time of the transaction. No one should therefore expect consumers to be bound by such clauses.
Even where such a clause is brought to the attention of the consumer at the time of the transaction, it is unfair and unrealistic to expect the consumer to appreciate its implications. Choice of jurisdiction and law in the case of disputes cannot be considered a true choice by the consumer unless it is made after the dispute has materialized, when the consumer can fully understand and appreciate its implications.
Will adoption of the proposed rules as general principles provide guidance and greater legal certainty for online consumer transactions conducted within Canada?
It is unclear what is meant by “adoption of the proposed rules as general principles” (emphasis added). Certainly, adoption of these rules would provide some guidance and greater legal certainty for cross-border consumer transactions within Canada. Specifically, the rules regarding applicable law and forum would be clear in the case of offline transactions, and online transactions where the business either took reasonable steps to avoid transacting with consumers in a given jurisdiction, or actively sought to conclude transactions with consumers in the other jurisdiction.
However, the rules would not be clear in the case of online merchants who neither actively solicit business in the consumer’s jurisdiction, nor actively seek to avoid concluding transactions in the consumer’s jurisdiction. Most commercial websites currently fall into this category: they neither actively target specific jurisdictions, nor seek to avoid their geographic exposure. It is highly desirable, therefore, that the rules provide more clarity as to how such cross-border transactions with such online businesses would be treated.

Would the application of the rules work in the offline environment?

PIAC submits that these rules would work well in the offline environment, where the location of business solicitations can be more easily determined.
Would the rules assist in ensuring that transactions on the Internet are governed by consistent principles – leading to predictable results regardless of the jurisdiction in which a particular buyer or seller resides?
As noted above, the rules would apply in a relatively straightforward manner in cases where the business is either clearly targeting a given jurisdiction or clearly attempting to avoid dealing with a given jurisdiction. However, they would not provide clear guidance in the case of online businesses who neither clearly target nor seek to avoid their geographic exposure. As the majority of online businesses currently fall into this category, it would be preferable if the rules provided more guidance in such cases.
The proposed rules center around whether or not the company engaged in “a solicitation of business in the consumer’s jurisdiction”. Where the vendor “clearly demonstrates that it took reasonable steps to avoid concluding contracts with consumers resident in a particular jurisdiction, it is deemed not to have solicited business in that jurisdiction”. However, where the vender cannot so demonstrate, a determination must be made as to whether it solicited business in the consumer’s jurisdiction.
Assuming that the vendor conducts no advertising other than on its website, but makes its website available to anyone accessing the Internet, and concludes transactions with consumers from a given jurisdiction without making reasonable efforts not to do so, is the vendor “soliciting business” from consumers in that jurisdiction? In other words, does mere website advertising, combined with actual transactions where no reasonable effort is made to avoid such transactions, constitute “soliciting business” under these proposed rules?
In the international context, language and currency would no doubt be relevant factors in a determination of whether the website solicited business in the consumer’s jurisdiction. However, in the Canadian context, there is only one currency, and there are bilingual residents in all provinces. Therefore, neither of these factors would be helpful in determining how the rule would apply.
Any statements by the online vendor suggesting that it does business in the jurisdiction in question would clearly be relevant, but such statements may not exist.
The rules as currently drafted provide little guidance to businesses or consumers in such a scenario. Greater certainty would be achieved by defining the term “solicitation of business”, so as to clearly include the situation posited above (i.e., passive website advertising combined with failure to meet the “due diligence” test set out in s.2 of the choice of forum rules). Thus, the onus would be on businesses to “de-target”- i.e., to take reasonable steps to avoid transacting in those jurisdictions they wish to avoid.
Such an approach is consistent with the principles set out above (asymmetry of information, incentives, and bargaining power). It is also consistent with the rule as drafted, which establishes a “de-targeting” test as a due diligence defence for businesses.
It is important to note that online businesses can easily restrict their geographic exposure. Reasonable steps to avoid such exposure include:

clear and conspicuous notices re: limits to geographic availability;
a requirement that consumers select the jurisdiction from which they are contracting;
the use of technological measures to block transactions with certain jurisdictions;
refusal to send goods to addresses in certain jurisdictions; and
refusal to deal with consumers whose address is in certain jurisdictions.

A consumer who intentionally or recklessly misrepresents her jurisdiction, in order to circumvent reasonable efforts by a business to limit its exposure, would not be able to benefit from the jurisdictional or applicable law provisions in these rules.

Suggested Revisions

For the above reasons, PIAC suggests that the proposed rule should include a definition of “solicitation of business” that includes all forms of advertising, including passive online advertising via websites.
Such a definition would clarify the rules for both businesses and consumers in the many situations where there is neither any clear “targeting” nor any clear “de-targeting”. It would reduce unnecessary and costly litigation, and would prevent the development of conflicting jurisprudence. It would place the onus on the party most able to bear such onus, by encouraging online businesses to decide which jurisdictions they are comfortable doing business in.
Businesses will no doubt argue against such a rule on the basis that it will reduce the benefits of B2C electronic commerce. Consumer groups, representing the primary intended beneficiaries of such commerce, have however consistently and unanimously taken the position that effective redress is more important to them than greater choice of products and services online. There is substantial choice in the online marketplace already; e-commerce even within a given jurisdiction has substantially increased the options available to consumers. Encouraging businesses to limit their geographic exposure to those jurisdictions in which they are comfortable being subject to consumer protection laws and courts is desirable, from the perspective of consumers.
In addition to the above issue, PIAC would like to mention two minor drafting issues. First, re: choice of forum rules, s.1(b) refers only to the vendor, and does not also specify a vendor’s agent (similar language exists in s.2(b) of the rules re: choice of law). Does the term “vendor” implicitly include agents of the vendor? If there is any doubt about this, the rule should specify “vendor or its agent”, such that the clause reads:
1. In circumstances where:
…..
(b) the consumer’s order was received by the vendor or its agent in the consumer’s jurisdiction; or…..
Second, s.4 of the proposed rules re: choice of forum adopts the language of the Brussels regulation, which is unfortunately unclear on a key point. Specifically, section 4(b) could be read to permit contracting out of the consumer’s right to access her own court system, when this is not the intention. This could be clarified by replacing the term “other than” with the term “in addition to”, so that the clause reads:
“4. The provisions of section 1 may be varied by agreement only if the agreement:
…(b) allows the consumer to bring proceedings in courts in addition to those provided for in section 1.”
Again, we appreciate the opportunity to comment on these proposed rules, and welcome any further consultation you may wish to undertake on this important issue.
Yours truly,
original signed
Philippa Lawson
Senior Counsel

Comments on use of charge-backs as a form of consumer protection

Consumer Measures Committee (CMC)
c/o Mr. Philip Halliday
Office of Consumer Affairs
Industry Canada
Room 962A, C.D. Howe Bldg.
235 Queen St.
Ottawa, ON K1A 0H5
BY FAX AND EMAIL
Dear Mr. Halliday:
Re: Use of Charge-backs as a form of consumer protection:
CMC Stakeholder consultation
The following are PIAC’s comments on the CMC Stakeholder Consultation Document “Use of Charge-backs as a form of consumer protection”.
The Public Interest Advocacy Centre is a national non-profit organization devoted to the representation of consumer interests in matters involving public utilities, essential services, and public interest issues of broad application to Canadians. Our focus is on the protection of lower income and vulnerable consumers, and on issues not already being addressed by other public advocacy groups. PIAC has developed a strong record of consumer advocacy since its inception in 1976, and is widely recognized as an important and influential voice for ordinary consumers in a variety of marketplace issues. PIAC is governed by a distinguished volunteer Board of Directors from across the country, and is supported by member groups and donors representing hundreds of thousands of Canadians.
1. Should the statutory charge-back remedy for contract cancellation rights be extended to apply to all sales channels in addition to Internet sales contracts (and distance sales, in the case of Quebec)?
Yes, it makes sense to provide a statutory charge-back remedy to consumers regardless of the medium through which they purchase (i.e., offline or online). From the consumer perspective, it would be difficult to understand why improper charges on their credit card may or may not be subject to this remedy, depending on whether the merchant in question was supplying goods offline or online.
Improper charges occur for a variety of reasons, not limited to the online context. Charge-back remedies should be available, under the same terms and conditions, wherever the payment mechanism used is susceptible to them.
2. Should the statutory charge-back remedy be extended to apply to situations of error correction?
Yes. Charge-backs should be available to consumers in all cases of improper billing due to a fault which is not their own.
Charge-backs should also be available in cases where the good or service ordered and paid for was delivered, but did not arrive in a reasonable time, did not arrive in good order, or was not as described, where the merchant refuses to refund upon return.
3. Should the statutory charge-back remedy be extended to apply to payment mechanisms in addition to credit cards? If yes, to which payment mechanisms?
Charge-backs only make sense where the payment system operator can “charge back” the merchant. If this is possible in other contexts such as debit cards, then there is no reason not to apply the same remedy in that context.
4. What sort of time limits should be included in a charge-back system?
The time limits that apply under the US Fair Credit Billing Act are reasonable and should be adopted here. (E.g., complaints to be lodged within 60 days, or at least 3 days before automatic payment will be made in order to stop payment; acknowledgement of receipt of consumer complaint to be made within 30 days; dispute to be resolved within 2 billing cycles or 90 days, whichever is less; cardholder to appeal resolution within 10 days)
5. Should there be a requirement for disclosure regarding charge-back rights?
Absolutely. Disclosure – and hence consumer awareness – is essential if the remedy is to be meaningful. Given that there is no incentive for credit card companies to make consumers aware of their chargeback rights (indeed, the incentive is to be mute about the possibility of charge-backs), statutory requirements for disclosure are required. In order to ensure that consumers are fully and properly informed, detailed rules are needed. The US Fair Credit Billing Act provides a good model for disclosure rules.
6. Should the obligations between credit card companies and merchants be addressed in the charge-back remedy?
No. The statutory remedy should address only what needs to be addressed in order to provide redress to the consumer. Credit card companies can and will draft their merchant agreements accordingly.
Yours truly,
original signed
Philippa Lawson
Counsel

Survey and Report by Consumers International

Alternative Dispute Resolution for online consumers: Survey and Report by Consumers International
PIAC works closely with Consumers International on the issue of consumer redress in e-commerce, and specifically on the issue of online dispute resolution. This 2001 report is an update of a survey conducted by PIAC for Consumers International in 2000. It provides an overview and analysis of online ADR services available to consumers in cross-border disputes with merchants, and offers recommendations for ADR providers and policy-makers. The 2000 report, “Disputes in Cyberspace”, is also available online from Consumers International.

Comments on Competition Bureau’s Draft Internet Advertising Guidelines

The following are brief comments on “Staying On-side when Advertising On-line: A Guide to Compliance with the Competition Act when advertising on the Internet.”
The Public Interest Advocacy Centre is a national non-profit organization devoted to the representation of consumer interests in matters involving public utilities, essential services, and public interest issues of broad application to Canadians. Our focus is on the protection of lower income and vulnerable consumers, and on issues not already being addressed by other public advocacy groups. PIAC has developed a strong record of consumer advocacy since its inception in 1976, and is widely recognized as an important and influential voice for ordinary consumers in a variety of marketplace issues. PIAC is governed by a distinguished volunteer Board of Directors from across the country, and is supported by member groups and donors representing hundreds of thousands of Canadians.
We have reviewed the Competition Bureau’s consultation draft and find that it sets out some appropriate guidelines for the online marketplace. We commend the Bureau on this initiative, especially the clarity with which it has expressed its intended approach to online advertising. The following are a few suggestions regarding areas which deserve further attention:

5. Representations about the Advertiser

“Identify the business on whose behalf the marketing or advertising is being conducted, if failure to do so would be deceptive.” This is an important guideline. However, it does not go far enough.

There are many examples of deceptive advertising via the Internet as a result of failure to identify hidden sponsors or transaction fees. For example, a website recruiting consumers for clinical trials in the USA, Dr.Koop.com, listed hospitals that were “the most innovative and advanced health care institutions across the country”, without disclosing that each listed institution paid US$40,000 to be listed, and that Dr. Koop received a 2-4% commission for products and services sold through the site. Amazon.com recommended books in online columns entitled “What’s worth reading” and Destined for Greatness”, and in email alerts to past buyers, without disclosing that publishers paid up to US$10,000 per book to obtain such listings.
Not only do sites in these cases need to identify the business on whose behalf they are advertising, they need to disclose relevant transaction fee arrangements, business relationships, and funding sources in order not to deceive consumers.

Add “hyperlinks” to the list of ways in which false impressions of affiliation, etc. can be created.

In addition to “representations about the advertiser”, representations about products for sale generally need to be addressed. One of the hallmarks of Internet advertising is its blending of information and advertising. In contrast to print or broadcast media, the unregulated Internet has allowed a situation to arise in which consumers are denied the kind of disclosures commonly provided in traditional media that provide them with the all-important context within which to judge what they read, hear and see. Online advertisements and paid announcements are commonly not labeled as such, and conflicts of interest are commonly not disclosed. It is critical, for consumers to be able to make informed choices, that they be able to distinguish between neutral information and advertising, sponsored content, or paid-for hyperlinks. Labeling of the latter is needed in order to prevent widespread consumer deception. We would therefore suggest the following additional guidelines:

Ensure that the purpose of the web site in question is clearly and honestly represented;
Label advertising, sponsored content, and paid-for hyperlinks as such.

Yours truly,
Philippa Lawson
Counsel

Comments on the CMC draft Template for Internet Sales Contract Harmonization

Draft Internet Sales Contract Harmonization Template: Comments to CMC

Note that the document being commented on can be seen at http://strategis.ic.gc.ca/SSG/ca01642e.html

Scope

We note that this harmonization template is limited to rules regarding information disclosure, contract formation, cancellation and reimbursement rights. Other issues that should be addressed in the context of Internet sales to consumers include:

liability and consumer rights to redress in the event of unauthorized online transactions (e.g., where the supplier fails to authenticate the identity of the purchaser);
liability in the event of failures in security mechanisms (e.g., theft of electronic signature)
validity of subsequent electronic notices (e.g., regarding a service purchased online) which were not actually received by the consumer (e.g., because Internet access has been discontinued or interrupted)

In each of these cases, consumers need protection. Specifically, they need protection from liability where the supplier failed to properly authenticate the identity of the purchaser, where an authentication or other security mechanism failed due to no fault on the consumer’s part, and where an electronic notice was never actually received by the consumer, regardless of the provisions of any sales contract.
In respect of authentication, it is important to recognize that businesses have access to information about electronic commerce-enabling technologies and the ability to limit and plan for the risks created by electronic commerce. Consumers, in contrast, have neither the access to information nor the expertise necessary to evaluate the reliability of a given technology. Moreover, unless fraud and error losses associated with online transaction technologies (and not attributable to carelessness on the part of the consumer) are allocated to technology providers and online vendors, there will be little incentive for investment in the further improvement of authentication technologies.

Information Disclosure

Para.4(1)(a) sets out key information that should be disclosed to consumers prior to the transaction, so that the consumer can make an informed decision as to whether or not to purchase. We agree that the information listed here is essential information that must be conveniently disclosed to the consumer before the transaction is entered into, and which is capable of being conveniently retained and printed by the consumer. If disclosures are not made in a manner that is convenient for the consumer, they are not meaningful disclosures.
We note that it is unclear whether 4(1)(a)(iv) includes “quantity purchased”. Confirmation of quantity ordered is important, given the likelihood of keystroke error in electronic transactions. We suggest making the requirement to disclose “quantity ordered” explicit in para.4(1)(a).
Para.4(1)(b) requires that this information be “located on one webpage…” and “made accessible on the Internet in a manner that ensures that the information is capable of being retained and printed by the consumer”. In comparison, the Alberta Electronic Sales Contract Regulation requires that a similar list of information be provided in “a form of electronic sales contract” that is either sent to the consumer via e-mail or “made accessible to the consumer on the Internet in a manner that ensures that the form is capable of being retained or printed by the consumer” (para.4 of Alberta Electronic Sales Contract Regulation).
We agree that the information listed in para.4(1)(a) should be included in any sales contract, and should therefore be provided to the consumer in a single form, so that the consumer need not print off several separate webpages, for example, in order to obtain a paper copy of the contract and all relevant info. (e.g.,supplier name and address) for future reference. Online consumers should be able to access all relevant contractual information in one place. It is important to note in this respect that an online consumer may not be able to access the online vendor’s website at a future date, and therefore needs to be able to retain all of this information at the time of the transaction.
The fact that some of the information set out in para.4(1)(a) is standard information that should be provided up front to all consumers visiting the site (e.g., supplier name, address, contact info., general restrictions on sales, general return policies) does not change the need for it to be incorporated into each contract of sale as well, for the reasons stated above. The only exception to this may be general “cancellation, return, exchange and refund policies” that do not apply to the transaction in question. For greater clarity, para.4(1)(a)(x), should be explicitly limited to those policies applicable to the transaction in question.
If, nevertheless, it is determined that return policies, for example, need not be incorporated into a single form or webpage, the template should require that such information be prominently disclosed on the supplier’s website, and that it be subject to the remaining rules in para.4(2).

Cancellation Rights

We support the approach to cancellation rights set out in paras.6 – 11. However, one potential problem area has not been addressed: consumer cancellation rights in the event of mistake (e.g., keystroke error) not noticed until after the contract was accepted. Presumably, the drafters intend that the rule requiring order confirmation (Para.4(1)(b)) will operate to prevent such problems from occurring. However, the reality in online contracting is that clicking and keystroke errors are easily made. For example, online vendors often highlight a given response (e.g., “I agree”), such that an unwitting consumer can engage the response by simply hitting the return key. Consumers who are interrupted or rushed can easily make such errors, and even confirm them, without noticing until it is too late.
In such cases, the cancellation right set out in para.6(1)(a)(ii) will not necessarily apply; the problem is not lack of opportunity to accept or decline the contract, but rather potential for keystroke/clicking error. In order to address this additional problem, consumers should have the right to cancel the contract within a certain time period (e.g., one hour) of inadvertently making it.
We also question how the rules would apply to oral cancellations (e.g., by telephone). Para.8(3) specifies that cancellation may be given “by any means, including but not limited to personal service, registered mail, courier, facsimile, and e-mail.” (The same provision appears in para.12(4).) Telephone is not listed, but nor is it excluded, implying that oral cancellations can be effective, but raising the questions: Why was telephone (a method likely to be used by consumers) not mentioned in the list of possible methods? What kind of evidence is needed to prove an oral cancellation?

Credit Card Chargebacks

Credit cards are the prevalent form of payment in online transactions. The credit card payment system offers an efficient mechanism for consumer redress in the event of inadequate disclosure and/or order confirmation process by an online vendor. Indeed, in the absence of a credit card chargeback, the consumer who exercises her right to cancellation under para.6 may well be unable to secure a refund from the vendor. In most cases, the cost of litigation to enforce one’s right to a refund vastly outweighs the value of the refund, hence many aggrieved consumers never obtain redress despite their statutory rights.
The availability of the credit card chargeback mechanism to provide consumer redress in such circumstances should be better exploited than it currently is by government agencies tasked with consumer protection. In this respect, we note that statutory rights to credit card chargebacks do exist in other jurisdictions, and that Canadian consumers deserve to be similarly protected. We therefore strongly support the inclusion of para.12, requiring credit card companies to reverse charges in cases where online merchants have failed to comply with their obligations under this regulation.

Jurisdiction

Para.3 of the draft Template notes that “Work is ongoing by the Committee concerning the issue of jurisdiction.”
This is an issue of great significance for electronic commerce, and one that PIAC has been working on through the Hague Conference and other fora. Work is underway by the Hague Conference on an international Convention (“Convention on Jurisdiction and Foreign Judgements in Civil and Commercial Matters”) dealing with this issue. The current draft of that Convention reflects the Brussels Convention rule (applicable to European countries) that consumers should always have the right to sue and be sued in their home courts regarding purchases that they made while in their home jurisdiction.
PIAC strongly supports the application of such a rule throughout Canada, as well as internationally. So-called “choice of forum” clauses in consumer contracts involve no real choice by the consumer. Rather, they are imposed on consumers in standard form, non-negotiable contracts. No one realistically expects consumers in the course of ordinary commerce to read or appreciate such clauses at the time of purchase. Hence, it is unfair to enforce such clauses against consumers in the event of a dispute. Consumers should always have recourse to their home courts for redress with regard to contracts that they entered into from their home jurisdiction.
Some businesses argue that such a rule will impede electronic commerce, since they will have to limit the jurisdictions in which they do business to those in which they are comfortable being subject to litigation. This is an appropriate result, in our view. Where a trade-off has to be made between increased commercial opportunity and improved access to justice, the latter should prevail. More consumer choice is of course desirable, but not at the cost of redress. Businesses can and should limit their consumer sales to those jurisdictions in which they are comfortable being subject to litigation by consumers.
We therefore urge the CMC to adopt a harmonized approach to jurisdiction in cross-border consumer litigation that reflects this well-established principle of fairness and justice.
~~END~~
Contact:
Philippa Lawson
Counsel
Public Interest Advocacy Centre
1204 – 1 Nicholas St.
Ottawa, Ontario K1N 7B7
tel: (613) 562-4002 x.24
fax: (613) 562-0007
email: pippa@web.ca
http://www.piac.ca

Comments on the Hague Convention on Jurisdiction

The Public Interest Advocacy Centre Comments on the draft Hague Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters

The Public Interest Advocacy Centre (PIAC) is a Canadian non-profit organization whose mandate provides for the representation of consumers in marketplace issues. PIAC’s organizational membership comprises thousands of Canadians. Over the past twenty-five years, PIAC has frequently intervened in regulatory, legislative, and other policy proceedings affecting large numbers of Canadian consumers. PIAC has been particularly active in recent years representing the interests of ordinary consumers in the new electronic marketplace, both nationally and internationally.

Introduction

In the context of electronic commerce, it is expected that cross-border consumer transactions will increase, and that as a result, so will cross-border disputes between consumers and merchants. Hence, governments need to work together to facilitate efficient and effective consumer redress across borders. We therefore welcome this Hague Conference initiative as it pertains to cross-border consumer litigation.
We are limiting these comments to issues around Article 7 and consumer contracts. Other important consumer issues raised by the draft Convention (e.g., intellectual property and tort claims) also need to be addressed. Our focus on Article 7 should not be interpreted as diminishing in any way the importance of these other issues.

Article 7 should be retained

Special rules for jurisdiction in the case of consumer contracts, as set out in Article 7, are a necessary component of any international treaty on jurisdiction. Article 7(1) recognizes important and well-established consumer rights to redress via their own courts in respect of contractual disputes with foreign merchants, where the merchant directs its activities to the consumer’s jurisdiction and where the contract was concluded by the consumer in the consumer’s home jurisdiction. Similarly, Article 7(2) as currently drafted recognizes important and well-established consumer rights to defend themselves against cross-border lawsuits in their home courts. Finally, Article 7(3) as currently drafted recognizes an important principle of fairness and equity: that choice of forum clauses in consumer contracts are rarely understood, let alone consciously negotiated, by consumers, and should therefore not be given legal force and effect. The Hague Convention must not detract from this existing body of law, by excluding consumer protections either wholly or in part via national opt-out rights.
Overall, Article 7 reflects the reality that consumers (both offline and online) suffer from tremendous information asymmetries and unequal bargaining power vis-à-vis sellers, and that if legal redress is to be made available to ordinary consumers in any practical sense, it must be available via their own courts.
Furthermore, the rules set out in Article 7 are essential for the development of consumer trust and confidence in electronic commerce, by assuring consumers of an accessible and trustworthy avenue of redress in the event of a dispute.
The following comments address issues identified in the document by David Goddard entitled “Proposed Convention on Jurisdiction and Foreign Judgments: E-Commerce Issues – An Outline”, under “Topic B – Consumers”.

Issue B1: Definition of “Consumer”

If the current definition of “consumer” in Article 7 is problematic, consideration should be given to extending the benefit of this Article to any person purchasing a mass-marketed product or service. In this way, the test for application of Article 7 would become one of the nature of the contract in question. Where the contract is a standard form, “take it or leave it”, contract, with no negotiation of terms between the parties, Article 7 should apply. We have no objection to broadening the definition of “consumer” in this respect, for the purposes of this Convention.
However, individuals concluding non-mass-marketed contracts for purposes outside their trade or profession still deserve the jurisdictional protections set out in Article 7, due to their relatively weak bargaining position vis-à-vis businesses.

Issue B2: Disclosure of Consumer Status

In respect of the application of Article 7, the selling party (generally, the repeat player) should bear the risk of failure to clarify whether the purchasing party is a consumer. In other words, businesses should assume that they are dealing with consumers unless they are advised to the contrary, or unless the facts clearly indicate otherwise. To take the opposite approach (i.e., to allow businesses to assume that they are dealing with businesses unless advised by a consumer to the contrary) would be to deny the reality of consumer-business transactions and the legitimate expectations of consumers regarding their legal rights. It would gut Article 7 of effectiveness, by establishing a default rule that allows businesses to easily circumvent important provisions designed to ensure consumer rights to redress.
In any given situation, however, the facts will determine whether a selling party’s assumption of the buying party’s status was reasonable. If a consumer was, for example, posing as a business, purchasing through a business-to-business portal clearly labeled as such, and ordering quantities that are normal for a business to order, then the consumer may not be entitled to protections under Article 7. Similarly, if a person fraudulently identifies himself as a consumer, that person would not be able to claim protection under Article 7. It is unlikely that any legal system would permit a person to benefit from such fraud.

Issue B3: Relevance of Consumer Location

The consumer’s location at the time of the transaction is a critical element of establishing jurisdiction (and identifying the appropriate forum) where a transaction occurs online. As Article 7(1)(a) provides, consumers should be entitled to access their home courts where they have taken the steps necessary for the conclusion of the contract in their home jurisdiction.
There is no reason to change this logical and long-standing rule. If businesses choose to transact with consumers in a given jurisdiction, they should be willing to submit themselves to the courts of that jurisdiction. Businesses who wish to avoid being subject to the courts of a certain jurisdiction can choose not to do business with consumers in that jurisdiction.
There is nothing about electronic commerce which justifies changing this rule. Electronic vendors, like non-electronic vendors, have various means by which to determine the consumer’s location, not least of which is simply to ask the consumer. Consumers who incorrectly characterize their location would not be able to benefit from Article 7’s jurisdictional rules.

Issue B4: Connection between Defendant and Forum (Article 7(1)(a))

Article 7 applies to contracts concluded by consumers. For this reason, there should not be any concerns about the application of Article 7(1)(a) where no contract is concluded. In particular, Article 7 does not expose online businesses to foreign jurisdictions unless and until they actually transact with consumers in such jurisdictions.
As noted above, online businesses who wish to limit the jurisdictions in which they may be haled can and should communicate to consumers any such limitations, and may rely upon a consumer’s declaration of location.

Issue B7: The Consumer as Defendant

Most litigation between consumers and defendants will involve consumers as plaintiffs, not defendants. There will nevertheless be situations in which businesses feel wronged and wish to obtain redress from consumers via the courts. It is entirely appropriate that the consumer in such situations benefit from the jurisdictional rule set out in Article 7(2). Otherwise, innocent consumers may find themselves subject to foreign court rulings based on vexatious lawsuits, incomplete submissions, or distorted facts, simply because they could not afford to defend themselves in the foreign jurisdiction. Allowing businesses to sue consumers outside of the consumer’s jurisdiction is to invite businesses to take advantage of consumers in this manner.
More likely, however, are disputes between consumers and businesses based on misunderstandings. To the extent that any rule regarding jurisdiction will benefit one party over the other, it should benefit the weaker party. It is reasonable in this case to expect businesses to take precautionary measures against loss. Businesses can (and do) ensure that they receive payment before shipping. Alternatively, they can use escrow services to eliminate the risk of non-payment. As repeat players with the resources and incentive to take such precautionary measures, businesses do not need to be protected against their own imprudence. Consumers, on the other hand, cannot be expected to go to the same effort as businesses to ensure that their contracts are honoured.

Issue B8: Jurisdiction rules should not be linked to use of Alternative Dispute Resolution (“ADR”)

We are aware of suggestions by business interests that the application of Article 7 be made contingent upon prior resort by the consumer to out-of-court redress systems. While we heartily support the development of effective online ADR options for consumers in cross-border disputes with merchants, we oppose any such requirements, for the following reasons:

It is unnecessary: if good ADR options are made available to consumers, consumers will use them before resorting to court.
It is premature: there is no system in place for ensuring that any ADR system meets minimum standards of fairness, independence, competence, transparency, etc.
Allowing businesses to force consumers into private ADR in this way would diminish the incentive for businesses to build and/or use good ADR systems (so as to attract consumers voluntarily).
Forcing consumers in engage in private ADR does not enhance consumer trust and confidence in e-commerce.
Forcing consumers to engage in private ADR before going to court unfairly prejudices their rights to redress via the courts, both by removing the consumer’s right to engage in class actions regarding the matter in question, and by failing to automatically stay the applicable limitation period for court actions.
Consumers should not be forced to engage a private justice system which lacks the long tradition and entrenched standards of fairness that characterizes the public justice system, which provides no guarantees of fairness, and which could in fact end up costing the consumer more.
Allowing businesses to require consumers to engage in private ADR before going to court permits abuse by unethical businesses (e.g., through use of biased or unfair ADR).

It has been suggested that a requirement for consumers to use ADR before resorting to court action be contingent upon independent accreditation of the ADR service, or some other method of guaranteeing that the ADR service meets certain minimum standards. Such musings may be interesting, but the reality is that no such system of neutral, independent, and reliable accreditation is likely to be developed in the foreseeable future. First, the standards themselves need to be developed, at an international level. Then, a system of accreditation and ongoing compliance assessment needs to be developed. Both the standards development process and the accreditation/compliance assessment process, to be credible, must involve the active participation and support of consumer groups. No international body meeting the requirements of neutrality and independence is currently working on any such project.
In any case, there are numerous other reasons, listed above, why the Convention should not and need not require consumers to make use of ADR schemes.

Enforceability of Arbitration Clauses under the Convention

There appears to be considerable confusion over how the Convention, as currently drafted, would treat arbitration clauses in consumer contracts. We do not presume to have any particular expertise in the interpretation of private international law Conventions. However, we do have views as to the results that this Convention should achieve. In this respect, it is critical that the Convention be clearly drafted so as to ensure that consumer rights to sue and to be sued in their home courts take precedence over any conflicting contractual agreements, including arbitration agreements.
As commercial arbitration is a practice largely confined to the business-to-business sphere of activity, it is likely that the exception in Article 2(g) was designed to exempt only business-to-business arbitration from the scope of the Convention. Business-to-consumer arbitration agreements cannot be accorded the same deference given the tremendous imbalance between the parties. Hence, if an exception for arbitration is maintained in Article 2, such exception should be explicitly limited to non-consumer arbitration.

Issue B9: Forum Selection Clauses

Forum selection (choice of court) clauses in consumer contracts should never be effective. Like other “fine print” in standard form contracts, such clauses are invariably imposed on unwitting consumers. They are not the result of conscious negotiation between two relatively equal parties. No one, least of all the business using such clauses, expects the ordinary consumer to address her mind to such clauses at the time of the transaction. No one should therefore expect consumers to be bound by such clauses. In effect, there is no forum “selection” other than by the merchant in such cases.
Even where such a clause is brought to the attention of the consumer at the time of the transaction, it is unfair and unrealistic to expect the consumer to appreciate its implications. Choice of jurisdiction, like “ADR-first” clauses, cannot be considered a true choice by the consumer unless it is made after the dispute has materialized, when the consumer can fully understand and appreciate its implications. This is appropriately recognized in the current draft Article 7(3), which permits choice of forum if such choice is made by the parties after the dispute has arisen.

National law exceptions

It has been proposed that the question of whether consumers can sue at home be left to national law, with the resulting judgments therefore not enforceable under the Convention. Such a rule could apply only in the case of a forum selection clause, or generally in respect of consumer contracts. We oppose any such “opt-ing out” by signatory countries of such a fundamental and important jurisdictional rule which is based on notions of fairness and justice that transcend borders. Consumers worldwide deserve to have effective access to justice, via their own court systems, in respect of contracts entered into from their home jurisdictions.
Contact:
Philippa Lawson
Counsel,
Public Interest Advocacy Centre
1204 – 1 Nicholas St.
Ottawa, Ontario K1N 7B7
tel: (613) 562-4002 x.24
fax: (613) 562-0007
email: pippa@web.ca
http://www.piac.ca