ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel
  • »
  • Education and Science»
  • Law & Legal Issues

Some Reflections on Consumer Protection Law and Policy

Updated on March 24, 2016

Introduction

Consumer protection is a modern phenomenon typical of 20th century. In origin, the laws which have a bearing on it, have roots in a much earlier age. These laws, however, were primarily meant to regulate competition and ensure fair trading. It was merely incidental that the consumer was thereby protected. The complexity of modern commercial society especially in the production, distribution and marketing processes of goods and services has given rise to consumers as an independent class of subjects ready to challenge the focal points of commercial and business law. This complexity has introduced the notion of exploitation of one commercial group called the consumers by another called the producer group because of the inequality of bargaining power as between the consumer and the producer and the difficulty of the consumer to make rational choice due to information deficiencies as to goods and services supplied by the producer. The protection of the consumer is therefore justified.

The strategic position of the consumers in the economy cannot be under-estimated because the production process would be worthless if the products of that process are not consumed. Yet, until much recently, the consumer was not a focal point in law. It was only in the regulation of the production and marketing process in the nature of regulating competition so as to ensure fair trading that the consumer came into focus and incidentally was protected. The complex modern commercial society with its imperfections as to the relative strength of the consumer to the producer which results from the sophistication of the production process and the products of that process and the general informational deficiencies of the consumer has given rise to the notion of exploitation of the consumer by the producer. The effect of this in legal relations is the shift in emphasis to, and the elevation of the consumer to a status group in economic relations requiring a distinct treatment.

The idea that the consumer deserves protection is widely accepted. For many centuries, it has been thought appropriate to protect the buyers or consumers against fraudulent or dangerous practices. This reflects a moral ethic and is well within the province of criminal law. The more difficult, question, however, has been why ‘protect’ the consumer when there has been no fraud by the producer or seller?

In general terms, the paternalistic disposition in sale of goods statutes, notably the implied inclusion of non-excludable terms as to quality in sales contracts, is normally justified in modern times by the idea of inequality of bargaining power. Other manifestations of this deliberate paternalism are in the rules of torts which enable consumers to claim compensation against sellers or producers where the goods are defective. However, the inequalities which necessitate the consumer protection regime sometimes also frustrate the small consumer from exercising the rights he is granted, largely on account of the disproportionate cost of litigation and its dilatory, adversarial process. The realisation of the consumer as a distinct subject or legal regulation is only gaining ground in Nigeria with the promulgation of the Consumer Protection Council Decree of 1992. The aim of this article is to critically examine the laws and issues relating to consumer protection in Nigeria and also to briefly examine the extent of the protection accorded the consumers in the international market.

The Term “Consumer”

It must be borne in mind that as far as the consumer protection law is concerned in Nigeria as at present we can only assume the existence of a consumer regime which creates specific consumer remedies. This is not quite in accord with the reality. Unlike in many other jurisdictions like Britain, Australia and the United States of America, there is neither a composite consumer statute nor an organised body of consumer law or jurisprudence in Nigeria. Laws on the subject of consumer protection are scattered in numerous statutes and numerous judicial decisions. Hence, the very term ‘consumer’ is not a term of art but is used in varying contexts for different regulatory purposes. The law has not yet arrived at a single or consistent definition of the term.

The term “consumer” however, encompasses a person to whom goods or services are supplied and any other ultimate user of the goods or services. This narrow view of the consumer focuses mainly on transactions entered into for obtaining products and services from commercial men or enterprises. It is limited to what the Germans call the Endverbraucker, that is, the ultimate consumer. In other words, it does not cover commercial transactions between businessmen or commercial enterprises.

This definition at once raises some critical problems which tend to confront this class of defendants, who are invariably poor and lack the expert knowledge to appreciate the features of many modern products which fall beyond the threshold of perception of the ordinary consumer.

In the first place, such consumers face an information gap when they enter into the transactions involving the purchase of products in a complex, mass consumption economy in which even the retailer often cannot offer advice on the important characteristics of the products he sells. Mark Green makes a remark on how consumers, even the most sophisticated can face difficulties:

"How does an average consumer know how much unhealthy radiation is being emitted from a microwave oven; or from his dentist's x-ray machine? Should we assume a car buyer can know whether his purchased motor mounts will fail, or when or whether tasteless and odorless carbon monoxide is seeping into the passenger compartment from the exhaust system or whether the drug he purchases is defective or toxic?”

Secondly, advertising not only fails to adequately inform consumers but also raised their expectations beyond what can be fulfilled by a product of service. Short of being misleading or dishonest, the law treats these as mere "puffs" excepts they form a term of the sale contract.

Thirdly, when consumers have cause to complain about a product or service, there is no guarantee that they will obtain satisfaction. If the company itself does not adopt a positive attitude to consumer grievances, there is an inbalance of power as consumers are typically in a weak bargaining position. The disparity in knowledge and resources between the parties narrows the consumer's access to a remedy.

Finally, legal remedies may well be available to consumers but there is clear evidence that many consumers are ignorant of their legal rights and are either unwilling or unable to pursue them within the framework of the existing judicial machinery.

Section 32 of the Consumer Protection Council Decree, 1992 defines the term "consumer" to mean "an individual who purchases, uses, maintains or disposes of product or services". This definition appeals to us especially when compared with the position under the English jurisprudence.

English jurisprudence generally looks at the capacity in which the consumer and the supplier of the goods and services acted when determining the meaning of the term "consumer". Here, the consumer is viewed as an individual dealing with a commercial or business person. The dealing is termed a consumer transaction. The English autorities have ascribed to a consumer transaction three elements. The first is that the consumer must be an individual who does not act in a business capacity. The second is that the supplier of the goods or services must act in a business capacity. The third is that the goods or services must be intended for private and not business use.

The English approach is helpful in shedding light on the notion of the consumer especially given our common law heritage. But it is fraught with problems. For instance, is a company an individual? The answer on the face of it is in the negative. Yet an English court held that a company can act as a consumer for purposes of the Unfair Contract Terms Act, 1977 (a consumer protection statute in the United Kingdom); or, is a sole proprietor or a member of a partnership an individual in circumstances where an item, say, a car is bought for both business and private purposes? Or, must a consumer transaction necessarily involve consumer durables? Put in another way, an item, for instance tissue paper or even a few of it would qualify as a consumer durable. But would plenty of it, say, five thousand, qualify? Although tissue paper ordinarily qualifies as consumer durable, yet its quantity may dictate its real character so that if bought in large quantity, it may be indicative of a trading activity so as to deny it the character of a consumer transaction (and hence a consumer durable). The experience in tax law leans to the conclusion.

In addition, the English approach of the three elements is objectionable on two fundamental grounds. One, they are limited in application in suggesting and providing for a consumer, a purchaser and a supplier who contract in the course of business. The effect is to exclude the consumer of the Donoghue v. Stevenson principle. Two, the approach insists on a contractual nexus between the consumer and the supplier of the goods or services. In this regard, contract concepts like freedom, sanctity and privity of contract and caveat emptor which generally restrict or limit liability will become operative. For instance, the effect of freedom of contract doctrine is to underscore the inequalities in bargaining power as between the consumer and the producer in allowing the operation of exculpatory terms, and that of privity is not only to restrict the range of consumers who can sue and the scope of producers (defendants) who can be sued but also to limit the range of goods against which a consumer can complain. This privity of goods restriction underlies our present sale of goods law under which goods exchanged for goods (barter) or for services or are acquired by way of free samples or via sales promotions do not qualify for the strict obligations implied on the part of the seller. This is because the sale of goods law regulates only contracts where the consideration for the goods is money called the price.

Section 32 of Decree No. 66 of 1992 allays the above fears and as such is preferable. Its shortcoming, however is that it is limited in application to only the Decree. Since the Decree merely establishes a Council with administrative and regulatory functions and powers, it means that the notion of consumer must be understood relative to the tenor of the Decree except for such provisions like section 12 of the Decree which assume the existence of other consumer protection laws.

To fully appreciate the concept of the consumer under the Nigerian legal system, therefore, one has to view all laws that touch on the consumer bearing in mind the above exposition on the subject. Here, the notion of the consumer (and hence the scope of rights and obligations that arise) depends on whether the nature of redress given is civil (private enforcement) on the one hand, or criminal or administrative and regulatory (public enforcement) on the other.

Under public enforcement, the formation of a contractual relationship is not necessarily required. The notion of a consumer here is therefore wide. It is in this sense that consumers can seek refuge under such laws as the Consumer Protection Council Decree 1992, the Food and Drug Act, 1990, the Weights and Measures Act, 1990, the Merchandise Marks Act 1990, the Standards Organisation of Nigeria and Control Decree No. 15 of 1993, the Price Control Act 1990 etc. In general, these laws established standards which producers must meet failing which criminal sanction would be meted out. The breach need not arise from a contractual relationship. In certain cases, liability arise even where no relationship with another party has arisen. For example, it is an offence under section 1(1) (a) of Decree No. 67 of 1992 to label, package or advertise any product in a manner that is false or misleading or is likely to create a wrong impression as to its quality, character, brand name, value, composition, merit or safety.

Under private enforcement, however, the formation of contractual relationship may necessarily be required. In this wise, the notion of a consumer becomes restricted to only a contracting party. This is the thrust of such laws as the Hire Purchase Act 1990, the Sale of Goods Laws, Innkeepers and Hotel Proprietors and Carriers Laws. In general, these laws establish their respective criteria for protecting the consumer, the breach of which gives rise to a civil remedy at the instance of the consumer. The breach must arise from a contracting relationship. For instance, under the Hire Purchase Act (S.1), there must be a hire-purchase agreement; under the Sale of Goods Law there must be a contract of sale of goods; under the Innkeepers and Hotel Proprietors Law, liability to a guest arises only when the guest appears able and willing to pay for the services and facilities to be offered, under the carriers law, liability of a common carrier of goods arises only where the carriage of goods is for a reward and the relationship between an insurer and an insured, and banker and customer is first and foremost contractual..

The above should not be seen as suggesting that in all private enforcement cases a contractual nexus must be established. Where the consumer chooses to base his action in negligence, he is not obliged to establish the existence of any contractual relationship; or in the case of common carriers, the fact of reward merely makes the liability strict for if the carriage of goods is for a purpose other than a reward, liability can arise in negligence.

The term “consumer” is therefore broad and encompasses such category of persons as hirers, buyers, hotel guests, commuters, bankers, bank customers, insured, medical patients, clients of lawyers and all users of goods and services. What qualifies them as customers, however, is that as private individuals, they deal with business or professional persons who are assumed to be superior to them in relation to knowledge and complexities of the goods or services in question. In this sense, a distinction is made between private and trade consumers as against private and trade suppliers of goods and services. In the province of consumer protection, only the private consumer in relation to the trade supplier of goods or services properly rank as consumer.

There is however, the converse situation of a private supplier of goods or services dealing with a trade buyer. Although this relationship does not strictly fall within the purview of consumer protection, the superiority of the trade buyer in relation to the private seller demands that this relationship be treated in the context of consumer protection. This fact is important given the incidents of sales by non-business individuals to trade buyers, for example, the sale of a used car by a non-business individual to a second-hand car dealer or the sale of farm produce by local farmers to professional produce buyers. There is no protection of the individual seller in cases such as these against the danger of being over – reached similar to the converse relationship of a trade seller and a private individual where there are implied terms. Although the individual seller may be aided by rules of fraud, undue influence or misrepresentation, they remain extreme cases only.

The notion of “consumer” would equally apply to public utilities or public services within the restriction of a contract of necessity. In the case of Amadi v. Essien, the Court of Appeal held that the notion of a consumer for purposes of suing the National Electric Power Authority (NEPA) went beyond registered consumers with NEPA. That any person who settles NEPA bills is qualified as a consumer with the locus standi to sue NEPA. This approach still utilises the contract approach since only a person who settles NEPA bills is that qualified to sue NEPA. A strict interpretation of this rule would mean that members of a household cannot sue if it is the head alone that settles the bills.

It is common to find the term “consumer” used by public utilities enabling statutes. For instance section II (c) of the National Electric Power Authority (NEPA) Act, 1990 authorises the supply of electricity “for consumers in Nigeria …..” and section 4(6) of the Electricity Act 1990 makes provision for the supply of electricity so as to secure the safety of consumers and the public. However the major problem consumers face in respect of public utilities is not just a question of who a consumer is for that purpose but the extent to which the public utilities can be proceeded against and the redress claimed where their products or services are defective. In general, legal policy clothes these utilities with either partial or absolute immunity in respect of their defective products or services. The inequity of this rule is to deny the consumer whatever protection he may have had by virtue of the right to sue

The Word “Protection”

The word “protection” may be used in two senses. Firstly, it means the prevention of accidents, wrongs or injuries occuring to users of goods and services. Given our uncertain world, however, accidents cannot be prevented in the sense that the probability of occurrence, is brought to nil. The protection envisaged, therefore, involves only the possible modification in the distribution of accidents. The laws providing for public enforcement perform this function in that they provide for quality control and standardisation, and they insist on compliance with safety measures or standards which are all geared towards accident or injury prevention or minimisation.

Secondly, protection means the provision of financial redress for the consumer who has been injured or suffered a loss. The laws providing for private enforcement essentially are geared towards this goal.

Given these two senses, consumer protection would therefore mean the prevention or reduction of wrongs or injuries, and the provision of redress to an individual who purchases or uses any product or service which is apt to cause injury.

The Necessity Of Protection

The basic question here is why protect the consumer even when his compliant might have been the product of his indiscipline? The answer is often found in the vulnerability of the consumer to exploitation by providers of goods and services. This is borne out of predominantly three factors. Firstly, there is a disparity of bargaining power between the consumer and the supplier of goods or services. Secondly, the disparity of knowledge concerning the characteristics and technical components of goods or services. Thirdly, a no less striking disparity of resources between the consumer and the provider of goods or services. This disparity reflects itself in the difficulty faced by consumers to obtain redress.

These cases of disparity account for certain basic assumption regarding consumer protection. In the first place, they account for the assumption that the skilled “technostructure” of industry with superior technological expertise can manipulate prices and demand (and lately, the evidenciary processes in litigation) to the detriment of consumers. Secondly, there is the assumption that thereby the consumer’s ability to make “prudent shopping decisions” is diminished. Thirdly they give inpetus to a moral or ethical justification for protecting the consumer on the necessity of redistributing power and resources from producers to consumers. The policies of loss spreading in shifting risks from consumers to producers achieve the ethical rationnales of consumer protection. Lastly, they justify the paternalist view that encourages state intervention to protect consumers against themselves or to exercise a discretion which it is felt the consumer is not enlightened enough to take. These assumptions underlie the whole spectrum of consumer protection.

The Interest To Be Protected

The question is what interests of the consumers are to be protected? In answering this question it is important to note that the factual complaints of the consumers are various and many which include complaints against fake goods, adulteration of goods, sub-standard goods, foreign materials in drinks, inherently dangerous goods, fraudulent or misleading trade practices, inflationary extortionist prices of goods and services, and defective services.

The consequences of defective goods and services can be quite fatal. For instance, in August, 1990, the production of locally prepared paracetamol elixir in University of Jos resulted in the death of about one hundred and nine children. Diethylene glycol, a notoriously toxic chemical used in the manufacture of anti-freeze and auto-brake fluide was inadvertently used in the formulation instead of the relatively safe propylene glycol.

In general, consumer complaints (and hence the interests that need to be protected) relate to the correlative interests in quality, quantity, price and fair trade practices in respect of goods and services. A look at the law will show that sometimes the law accords full protection. For instance, the protection against defective goods under the sale of goods law or the law may deny protection. For instance, if the compliant as to the state of the goods relate to durability or that they are of inferior quality, the law would deny protection as merchantability does not necessarily include durability and does not connote that the goods are of any specific grade or quality or by granting immunity as where lawyers are immune from liability in respect of the conduct of cases and NEPA in respect of supply of electricity or, the law may remain passive because it is difficult to give protection as where the complaint is that goods have been faked. The problem here is one of identification of the faker of the goods, even where he is identifiable it may be difficult to redress the consumer in person as the faker would most likely be handed over to the police. This was what the Standard Organisation of Nigeria (SON) did when it was reported to them that a certain drug that is, Nivaquine, was faked in Onitsha. In the case of the National Agency for Food and Drugs Administration and Control (NAFDAC), the option much preferred is prosecution in court.

The above instances aside, various deceptive and unfair trade practices abound against which little or no sanctions (civil or criminal) exist. For example, high pressure sales; sales promotion where guarantees or prizes are provided the terms of which make them worthless; emotive, vague or ambiguous and generally deceptive and unfair advertising. In any event and in majority of cases, the real consumer complaints may be regarded by legal policy as mere inconveniences not actionable even as of right; for instance, delays in rendering services, poor quality services etc. Added to these inconveniences are the generally diffused interests of the consumer. The point here is that an individual consumer’s interest in any one product or service will usually be so small that it will not be worth his while to even register his dissatisfaction with the item.

However, given the mass-consumption economy, the impact of benefit to the producer may be large in the aggregate at the same time of which the impact of harm would be large in the aggregate but small for any one individual. The effect here is that legal policy would have failed to either deter socially wasteful activity or to compensate for violations of rights. Only an effective public regulation as by the Consumer Protection Council would address this problem.

The Philosophical Basis Of Consumer Protection

Three ideological bases are generally advanced as underlying a consumer protection regime of any given economy. These are individualism; paternalism or regulation; and information or disclosure. Individualism relies on voluntary and unhindered exchanges (private orderings), sees the consumer as his best protector; and consequently is epitomised by the caveat emptor rule. The reasoning here is that voluntary and unhindered exchanges have the effect of increasing production (and hence consumption) which enhances the economy. Consequently, regulatory measures like implication of terms, control of advertising etc. which have the capacity to inhibit consumption must readily be discountenanced and barred.

Paternalism is antithetical to individualism in recognising the vulnerability of the consumer in the market place given the paucity of information as to technologically complex goods and services and the uneven bargaining power between the consumers and the producers (or providers) of goods and services. Consequently, the inbalance can only be redressed by vigorous regulation whereby the law or the state acts for and on behalf of the interests of the consumer in the market place.

Information or disclosure seeks a mid-way between individualism and paternalism in that it argues for the consumer to be given all the information he needs to make an informed choice. the information required here runs through from the level of advertising to the point of sales. In appropriate circumstances, the informational duty could be imposed on producers after a sale as where the producer is obliged to warn consumers of an unforseen hazard arising from the use of a product if this becomes known subsequently.

The information philosophy admits of problems. For instance, legal rules may conspire against it as where the law sees nothing wrong with sale of near expired goods (even if they had only a day left); or assurance and representations which may be the information that a consumer relies on in fact before striking a bargain may be treated by the law as totally irrelevant to determination of the nature of the bargain. Here, the law will conclusively presume a man to have assented to propositions in the written agreement which as a matter of common sense, and indeed judicial observation he has not. By means of the parol evidence rule, the law steadfastly refuses to listen to evidence as to the real bargain struck between the parties.

The consumer protection regime in Nigeria utilises the three ideologies of individualism, paternalism and information. For instance, individualism is manifested by the retention of the caveat emptor rule in appropriate circumstances; parternalism or regulation by the implication of terms in transactions; the enforcement of quality (and safety) standards by established regulatory agencies; and the insistence on certain informational requirements utilize the information or disclosure philosophy.

Is it possible to put consumer protection law into pigeon holes in the name of classification? This question is pertinent because if we are to evolve a consumer protection regime, it is necessary to know what principles, interests and subject heads that regime would have. The problem is that these principles, interests and subject heads are various, diverse and often conflicting. In view of this it is pertinent to note that the consumer protection laws can be classified in various ways. They can be classified according to whether they are federal or state laws. The federal laws include the Hire Purchase Act 1990, the Food and Drugs Act 1990, the Price Control Act 1990, the Merchandise Marks Act 1990, the SON Act 1990, the NAFDAC Decree 1993, the Consumer Protection Council Decree 1992 and the Trade Malpractices (Miscellaneous Offences) Decree 1992. The state laws include the Sale of Goods, the Carriers, the Innkeepers and Hotel Proprietors laws. They can also be classified according to whether they relate to goods or services; whether the laws are regulatory or administrative (public enforcement) in nature in contrast to the normative character of laws under private enforcement. The fourth classification relates to the interest of the consumer that is protected whether as to quality, quantity price or unfair and deceptive trade practices. The last classification is the case law classification, meaning those laws that owe their origin and development to the common law or case law heritage.

CONSUMER PROTECTION IN THE INTERNATIONAL MARKET

For the purposes of this paper “international market” simply refers to a situation involving a consumer or consumers in one country and producers of products manufactured or emanating from another country. The main task here is to determine the law which should regulate and govern such situation in protection of the consumers. Against this background, the effectiveness of the private international and that of the public international law shall be critically examined this write-up.


Private International Law

A consumer who has suffered injury as a result of defective product may take an action in torts or in contract. He could also take an action in both. Where the action is in torts then under traditional conflict rules the action will be brought in the state where the tort occurred. On the other hand, the position will be different if the action is framed in contract as the international elements would enable a party to raise a conflict of laws question, that is, what is the proper law of the contract?

As regards an action in tort the rule in England is simply that it can be maintained in England if the alleged conduct is actionable both in England (under the lex fori) and in the foreign state where the alleged tort occurred (under the lex locidelicit commissi). This is known as the double actionability rule. Where this test is satisfied, the lex fori would apply generally. However, the law of the place most closely connected to the parties and the occurrence may apply with respect to some particular issues. This qualification is a rule which does not appear to have been applied clearly in any decided case. As a result of the criticisms levelled against the double actionability rule, there is a more now to adopt what is termed “the proper law of torts” arrived at by a near similar analysis as adopted in arriving at the proper law of contract.

If an action in torts is brought in the U.S.A., the choice of law rules differ. Until the New York case of Babcock v. Johnson, the US courts applied the lex loci delicti commissi. However, the Babcock case introduced a flexible approach to the issue so that the applicable choice of law rule would reflect “a consideration of other factors which are relevant to the purposes served by the enforcement or denial of remedy”. The court in that case held that justice, fairness and the best practical result may be best achieved by giving controlling effect to the law of the jurisdiction which because of its relationship or contact with the occurrence or the parties, has the greater concern with the specific issues raised in the case.

Where the claim is framed in contract, it does not matter whether the forum is the court of the state where the cause of action arose or where the plaintiff has his habitual residence. Where the contract is internationalised, the question of applicable law becomes relevant and the court ought to determine it one way or another. Under English law, the law applicable to a contract is the proper law of the contract. The doctrine of party antonomy permits the parties to a contract freely to choose the system or systems of law which would govern the entire contract or parts thereof. The parties would not however be competent to choose any system of law the application of which would be contrary to public policy in England. Also, the parties cannot by the express of law avoid the application of any mandatory rule of English law which should have applied in the case but for the express choice of law by the parties. An example is the Unfair (Contract) Terms Act, 1977. An English court would also not enforce the performance of a contract, which is intended to be performed in a foreign state in breach of the laws of such foreign state.

It is not in all cases that the parties make an express choice of law to govern their contractual relationship. It is therefore the task of the court to ascertain the system of law which the parties intended to apply. This intention is objectively ascertained by looking at the terms of the contract and the surrounding circumstances. Thus, the proper law of the contract is the system of law by reference to which the transaction has its closest and most real connection. In determining the system of law with which the contract has its closest and most real connection the place where the contract is made, the place where the contract is performed or intended to be performed, the place of habitual residence or nationality of the parties are all relevant factors. Since the conflict of law rules in Nigeria are in substance similar to English rules, it appears the Nigerian courts, would also adopt this test.

The conflict of law rules in the U.S.A. with regard to the law applicable in contract claims recognises the antonomy of the parties in selecting the law that would govern the contract. However, where the law chosen by the parties would have the effect of displacing the law of a state with a materially greater interest in the matter and whose laws would have applied in the absence of an express choice by the parties, the law of such state would apply. The courts will also not apply any law chosen by the parties which is unreasonable.

It can therefore be said that under both torts and contract claims, applying the usual conflict of law rules, it is most likely that the consumer who suffers loss or injury from the use of an imported product in his state will not be able to invoke successfully the law of the producers home state. This position renders helpless the consumers in developing countries with weak consumer protection laws and who have bought and used the products imported from developed states with strong consumer protection laws. This situation may also encourage the producers from the developed states to export sub-standard products to developing states, capitalising on their weak administrative frame work for consumer protection.


Public International Law

States have in their desire to simplify the determination of applicable law in international transactions entered into treaties. These treaties provide for uniform choice of law rules to be applied by the courts of the contracting states. Although these treaties eventually become tools of private international law, they nevertheless, derive their source from public international law. A good example of such treaties is the Rome Convention of 1980 which applies to any contractual situation involving a choice between the laws of member states of the European Economic Community.

The thrust of the convention is contained in Article 4, 5, 6 and 7. Article 4 provides for the application of the law of the place the injury occurred if that place is also the place of the plaintiff’s habitual residence, or the place where the plaintiff bought the product, or the place where the manufacturer has his principal place of business. Where Article 5 is applicable, it overrides Article 4. Article 5 provides for the application of the law of the place of the plaintiff’s habitual residence if that is also the place where of business, or the place where the plaintiff bought or acquired the product. Under Article 6, the applicable law shall be the law of the state where the manufacturer has his principal place of business, unless the plaintiff chooses to rely on the law of the place or injury. By virtue of Article 7 of the convention the law of the plaintiff’s habitual residence would not apply if the producer would show that he could not reasonably have foreseen that the product or his own products of the same type would be made available in the consumer’s state through commercial channels.

The moral therefore is that the consumer protection in substance is at the moment more a matter for domestic legislation then international law. There are no international law standards for consumer protection. In this connection, the developing countries should seek to develop adequate frame works for the protection of consumer within their territories.

The United Nations seems to appreciate this point very well. The UN however also appreciates the hardship of developing states in developing rules which could successfully control conduct and event in the international market where powerful multinationals seem to dominate. The UN also addresses the problem from a very broad perspective rising beyond mere questions of product or service liability to issues about “competition, pricing policies, advertising and marketing techniques, effects on consumption patterns and health, as well as impact on traditional culture” as these affect multinational corporations doing business in developing countries. The UN effort is encapsulated in the United Nations Guidelines on Consumer Protection of 1985 (the guidelines). The Guidelines show the extension of Western concepts of consumer protection to third world states and the reliance on government intervention to control the practices of multinational corporations. The Guidelines have the following objectives.

(a) To assist countries in achieving or maintaining adequate protection for their population as consumers;

(b) To facilitate production and distribution patterns responsive to the needs and desires of consumers;

(c) To encourage high levels of ethical conduct for those engaged in the production and distribution of goods to consumers;

(d) To assist countries in curbing abusive business practices by all enterprises at the national and international levels which adversely affect consumers;

(e) To facilitate the development of independent consumer groups;

(f) To further international cooperation in the field of consumer protection;

(g) To encourage the development of market conditions which provide consumers with greater choice at lower prices.

And more specifically the Guidelines call on members to inter alia:

(a) Adopt appropriate measures including measures within their legal systems and safety records to ensure that products are safe for either the intended or normally foreseeable use;

(b) Adopt policies which would enable consumers to obtain optimum benefits from their economic resources through insistence on satisfactory production and performance standards;

(c) Establish or maintain legal and administrative measures to enable consumers or relevant organisations to obtain redress expedititiously and inexpensively;

(d) Development and encourage the development of general consumer education and information programme through, inter alia providing for consumer education as an integral part of the basic curriculum of the education system; and

(e) Provide inter-governmental opportunities for cooperation in the development, review, maintenance and strengthening of appropriate mechanisms for the exchange of information on material policies and measures.

What the Guidelines have done is basically to toss the ball back in the court of each State, though such State could seek international cooperation in developing an effective domestic consumer protection regime that would be able to protect the consumer in the domestic as well as the international market.

The cooperation envisaged above is best achieved through Conventions either in relation to substantive law or procedural law, i.e. choice of law rules, which would enable the consumer to obtain the best protection and redress available from all the jurisdiction having some connection with the particular event.

One may ask why the UN has not called universal standards for consumer protection as we have for environmental protection. One possible reason is that the “environment” is more important to the UN than the “consumer”. Perhaps the “environment” is broader and even includes the “consumer”. But the more attractive reason seems to be that, as developed states have shown, consumer protection can be effectively tackled at the national level. It is also true that since any weakness in any municipal system is unlikely to affect the strength of the regime in another jurisdiction, consumer protection may not be perceived as a global problem. Put in another way the consequences of poor or weak national consumer protection regimes are largely localised. There is therefore no interest on the part of developed States to develop international standards, moreso where existing conditions ensure to the benefit of their commercial and mercantile interests. This cannot be said of environmental protection. The weakness in a national system for the protection, even when some of the environmental problems being touted may not be very relevant to developing countries. But we live in an unequal world, and so unless “an international standard” serves the interest of developed States, its emergence would almost certainly be scuttled.

The summary is that at the moment public international law does not offer much for the protection of the consumer in a developing State in the international market. But we know that international law could be employed as a means to secure adequate protection for the consumer in the international market.


The Framework Of Remedies In Consumer Transactions

There has never been developed in Nigeria a fully coherent body of law designed to deal with consumer issues. What exists is resort to a hotchpotch of common law concepts and remedies designed primarily for other purposes. The product of this is that consumer law is a hydrid creation involving on the one hand, right and remedies afforded consumers under private law and on the other, statutory intervention in the consumer interest by administrative remedies backed by criminal law sanctions. This places the individual consumer with a particularised complaint in the words of Leder in a “mixed legal economy”.

Within the realm of private law, liability may either be contract – based or tort – based within the conventional compartments of the law of civil obligations. Liability arises in contract where there has been breach of an express or implied term of the contract of sale, or alternatively the criteria established by statute to regulate the particular contractual relationship as giving rise to a civil remedy at the suit of the consumer. Thus, the remedies available often depend on what kind of contract is involved.

Tort – based liability is almost entirely founded on the common law concepts of negligence, although other heads of liability in torts like deceit or misrepresentation may also be available.

Essentially therefore, the civil remedies available to a consumer are defined with reference to the head of liability, that is, whether in contract or tort.

From the point of view of the consumers, the law providing private remedies appears unhelpful at different levels:

(i) The liability regime as it now exists does not lean in favour of consumers. Contractual remedies are limited by the conceptual rigidities of the doctrine of privity of contract while tort liability over-emphasises fault as a condition for liability in negligence.

(ii) The law of contract is founded on the erroneous assumption that contracts are made between parties of equal bargaining strength.

(iii) The remedies themselves are often inadequate to address the real interests or expectations of the consumer. Compensation or restitution by way of damages remains the principal remedy of the civil law although in limited circumstances, equitable remedies such as specific performance or injunction may also be issued.


Contractual Remedies

From a consumer point of view, it will be helpful to categorise contractual remedies into two:

(a) Remedies for misrepresentation.

(b) Remedies for breach of contract.

(a) Remedies for misrepresentation

Within the general law of contract, an agreement is subject to rescission by the innocent party where it has been affected by a misrepresentation, whether fraudulent, negligent or innocent. Damages could also be claimed in lieu of rescission. Rescission itself is subject to equitable bars: if restitutio in intergrim is no longer possible or third party rights have intervened or there has been confirmation of the contract with knowledge of the representation or the innocent party is guilty of unreasonable delay.

In general, liability for misrepresentation arises from statements or undertakings outside the contract although it seems possible to claim for misrepresentation arises from statement or undertakings outside the contract although it seems possible to claim for misrepresentation even when the representation has become a term of the contract. However, the latter is remediable as a breach of condition or warranty.

(b) Remedies for Breach of Contract

When a consumer has contracted for goods or services which are either not supplied or are discovered to be unsuitable or of defective quality or not to comply with description, the law provides him with a range of remedies including:

(i) self-help or first-step remedies like the buyer's right to reject the goods supplied and to withhold payment or performance of his own part of the contract or repudiate the agreement.

(ii) order of specific performance, compelling a defauting party to perform:

(iii) actions for damages or restitution involving a claim for compensation.

Tort Based Remedies

Negligence - based liability has been a major advance on the construction of the privity rule in contracts. As designed in Donoghue v. Stevenson, it made it possible to hold a manufacturer liable in damages for the tort of negligence to anyone injured by a defective product if lack of care was established on the part of the manufacturer. This extended the range of possible plaintiffs in an action against a manufacturer beyond the purchaser to include, to use Lord Atkin's well known dictum in Donoghue's case, "anyone who is so closely and directly affected by the manufacturer's act that he ought to have them in contemplation as being so affected when directing his mind to the acts or omissions called in question". This would cover friends, family members, employees and even bystanders, etc. Negligence has also provided the basis of liability for defective services using the test of reasonableness to determine the standard of care and skill in consumer service transactions

Statutory Intervention Or Public Enforcement

Under public enforcement, the formation of a contractual relationship is not necessarily required. The notion of a consumer here is therefore wider. It is in this sense that consumers can seek refuge under such laws as the Consumer Protection Council Decree 1992, the Trade Malpractices (Miscellaneous Offence) Decree No. 67 of 1992, the Food and Drugs Act 1990, the weights and Measures Act 1990, the Merchandise Marks Act 1990, the Standards Organisation of Nigeria Act 1990, National Agency for Food and Drug Administration and Control Decree No. 15 of 1997, the Price Control Act 1990 etc. In general, these laws establish standards which producers must meet failing which criminal sanctions would be meted out. The breach need not arise from a contractual relationship. In certain cases, liability arises even where no relationship with another party has arisen. For example, it is an offence under S. 1(1) (a) of Decree 57 of 1992 to label, package of advertise any product in a manner that is false or misleading or is likely to create a wrong impression as to its quality, brand name, value, composition, merit or safety.

Conclusion

It is sad that even at the turn of the century, we cannot boast of an effective consumer protection legacy. Yet few areas of the law affect the average individual as directly as consumer protection. As consumers of complex goods and services we are exposed daily to problems of product and services safety, quality and quantity, fair trade practices and dispute resolution. The nature and extent of consumer protection regulation in modern society says a great deal about that society, about its social and economic development, about its sense of justice and about its legal values. No doubt, we cannot lay claims to have reached or even reaching optimal levels in these values. However, our national aspiration and goals must be geared positively towards attaining them. Consumer protection is one legal head that portends in this direction. As a mechanism for national development and growth, it transcends political cleavages and so can be used by any of the political ideologies. In essence, there can be no political disagreement about consumer protection.

It is this universality of consumer protection that we must bear in mind in articulating the normative or doctrinal framework that it must have. It appears a regime of producer liability founded on strict liability would serve our purposes. Given the intricate problems of private enforcement, this regime must be supported by a public enforcement mechanism which incorporates in its mandate a consumer education and awareness programme. A sensitised consumer is an empowered consumer, and consumer empowerment equates with consumer protection.

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.