Latest news

« »

Monday, 25 July 2011

Liability for injury caused by broken-down truck

A recent case in the New South Wales Court of Appeal, Wagga Truck Towing Pty Limited v O'Toole; IAG Limited t/as NRMA Insurance v O'Toole [2011] NSWCA 191, deals with liability for Mr O'Toole's injuries sustained when a truck rolled onto him. Although - of course - it doesn't have direct application to what happens in the UK, it's a cautionary tale for operators of commercial vehicles (indeed, probably all vehicles) and for towing companies.

Mr O'Toole was a passenger in the truck, an Isuzu, owned by a Mr Russell, his employer, which was carrying a V8 Holden race car when it broke down. Mr Russell parked it up, put it in second gear and engaged the handbrake, then phoned the recovery company. Over the phone, Mr Cool, the recovery driver, suggested, given that he had tools to hand, and an assistant, he get the tail shaft (which I think is what I would call the propshaft - am I out of date?) off to save time once the recovery vehicle arrived. So Mr O'Toole, having asked Mr Russell if the vehicle were safe and having been assured that the handbrake was on, got under the truck and did just that. However, the handbrake did not operate on the wheels, it operated on some part of the transmission (the court heard no evidence about this so there was a lot of inferring involved, including that this particular truck was probably not unique in this respect), so removing the tail shaft freed it to roll down the incline on which it was parked, over Mr O'Toole, causing him serious injury. In fact the truck then proceeded to cross the carriageway and come to rest against a bank on the other side.

The trial judge decided that Mr Russell, who, for the purposes of the Motor Accidents Compensation Act 1999 was the driver and the person in charge of the vehicle, bore 70 per cent of the responsibility for the accident. The towing company which had given him negligent advice took the balance. The fact that Mr Russell had acted on that negligent advice and without it the accident would not have happened did not absolve him from responsibility - indeed, did not even reduce the burden much, although the Court of Appeal (which largely upheld the judge) split the liability 50:50. Mr Russell, though he raced the Holden, was no expert in mechanical matters - but the court thought a reasonable person would have understood that disconnecting the tail shaft would remove the benefit of having engaged the gears, even if they didn't realise that it would also make the handbrake ineffective. The reasonable person would have chocked the wheels before starting to unscrew bots from underneath the vehicle.

Incidentally, although the 1999 Act imposes "no fault" or strict liability in certain circumstances, this is not one of them - the case turned on whether there was negligence.

Cookie regulations

New regulations on the use of cookies (small computer files set by websites to record information about visitors) came into operation in May, and we were all told that they weren't as draconian as was feared. In particular, the government had concluded that there was no need to get prior consent to setting a cookie: consent obtained at any time would suffice. That was certainly a useful way of interpreting the legislation, removing much of the compliance burden from businesses.

It does, however, seem to fly in the face of logic. If I were to tell my children not to do something without permission, I would not expect them to do it and then later seek ratification. Consent by (usual) definition must be in place before the act consented to is performed - otherwise, logically, the act is performed without consent and nothing that happens thereafter will change that. But logic and interpreting EU directives have little in common.

The government's convenient approach to the matter is now in trouble. The excitingly-named Article 29 Working Party (comprising the data protection commissioners of the EU Member States, convened under the eponymous Article of the Data Protection Directive) has produced an opinion, floating a proposed definition of "consent" - a 38-page document, dealing with something that might usefully have been included in the data protection Directive in 1995 (from which the cookies directive adopts the idea of consent) - and they favour the logical approach. The opinion is only a suggestion to the Commission, though, and will not give rise to enforcement proceedings. Indeed, the Commission went so far recently as to announce that only five Member States had properly implemented the cookies Directive - the UK among them. maybe it will have to reassess that now.

Meanwhile, to comply strictly with the law, the right course is to follow the directive, not the UK guidelines. If the Commission thinks that the concept of "consent" implies "prior", as the Working Party says it should, that is the sensible way to look at it. Logical, too.

(See the story on Out-Law.)

Selling franchised dealerships

In addition to motor industry legal news here, I maintain a blog on the Block Exemption - not as frequently as I would like, but today I have posted a piece about the rules on transferring franchised dealerships and posting it on this blog as well seems unnecessary when a link will do just as well. I'll continue to use The Blog Exemption for block exemption news and comments.

Friday, 22 July 2011

Code of Conduct latest

The latest edition of Motor Law reports on developments on the much-vaunted Code of Conduct, intended to supplement the block exemption and re-establish a degree of dealer protection. The last word when the newsletter went to print was that the Commission had pressed ACEA to reach agreement with CECRA, with the threat that the Commission would impose something if the parties were unable to agree by November. Although ACEA, which has proposed a limited Code of Conduct, finds itself portrayed as the "baddie" (the inverted commas are to indicate that what's right and what's wrong in this situation depends almost entirely on where you are standing) it is important to remember that CECRA's original stance was to oppose a code and stick out instead for protective measures in the new block exemption - which of course were not forthcoming.

We now understand that ACEA has announced that it will not participate in further discussions about the content of a Code, which might well mean that the manufacturers will unilaterally promulgate their own Code without the additional protection sought by CECRA. Or maybe it's just another move in the perpetual game of horsetrading that goes on in Brussels ...

We also hear that the Q&A document on the new block exemption, promised by the Commission for July, will now not appear before September. Given the imminence of the summer holidays, that is no great surprise - perhaps any promise by the Commission that involves the delivery of something in July should instantly be discounted.

Motor Law volume 12 no 9 - links to source material

I thought readers might find it convenient to have links to documents mentioned in the Newsletter, so here's the first set. Your newsletter should be appearing on your desk very soon - if it hasn't already done so. For the future I hope these links can be embedded in the electronic version of the newsletter but they will also be posted on this blog anyway.

Thursday, 21 July 2011

Latest issue ...

The latest issue of Motor Law (May/June 2011) is now on its way to subscribers. Electronic subscribers have already received theirs - if you'd like to receive yours by email in future please let me know (post a comment to this, for example, or email me).

In the latest issue:

  • New Dealer agreements: what’s the
  • hurry?
  • Dealer protection and the block exemption
  • US: Ford ordered to pay damages to truck dealers
  • US: Dealer standards
  • Replacing defective goods
  • US: Former Suzuki Dealer Facing Multiple Suits
  • Consumer protection applies on the Internet too!
  • Motor Codes
  • Distance selling
  • Consumer remedies for unfair trading
  • OFT takes action against online retailer
  • Replacing the Office of Fair Trading
  • Review of redundancy and transfer laws promised
  • Redundancy as unfair dismissal
  • Honeywell and BorgWarner settle US turbocharger patent dispute
  • ‘Imported from Detroit’ trademark
  • Phoenix Four agree to be disqualified
  • Execution of Documents by a company
  • Car parts cartel raid
  • VW takeover of MAN delayed 
  • OFT publishes guidance and survey on competition compliance
  • Restrictive covenants
  • Unfair terms 
  • Subaru urged to pull out of Saudi Arabia
  • OFT announces package of measures to address concerns over credit practices 
  • Expert witness immunity

Commission investigates BMW and VW state aid

The European Commission has opened a formal investigation into German aid to BMW and Volkswagen. Here is the press release.

Tuesday, 19 July 2011

Competition investigations in the parts sector

Antitrust scrutiny of parts-makers is increasing, throughout the world, the Financial Times reports. I mention some of this in the latest Motor Law, which incidentally will be in the post to subscribers in a day or two. The  story in the newsletter mentions investigations being carried out by the European Commission and the US Department of Justice which seem to be focussed on Autoliv and TRW and in particular on safety-related parts.

Of course, the motor industry has always attracted the attention of the competition authorities, which is why it has its own block exemption regulation. The Commission is presently engaged in an investigation into price-fixing in the truck industry, too. This is part of a general picture of increased enforcement activity across the board, and perhaps what is happening in the motor industry is just a proportionate share of that increased activity - but it feels like it's more than that. The FT report says that the US authorities are investigating cartel activity in the auto electronics industry, though the paper says that they declined to comment further: no doubt we will hear more about it in due course. There is also an investigation into suppliers of wiring harnesses (what were called "looms" when and friend and I replaced the one in my Frogeye in 1977), involving the Japanese competition authorities and concentrating on suppliers in that country.

This comes on top of financial penalties imposed by the Commission on members of a cartel of glass makers a couple of years ago. Car makers are pursuing damages against them. That will be an interesting case to follow, as civil claims for damages arising from competition breaches have never lived up to expectations.

The FT has some possible reasons for this increased scrutiny. There has been a great deal of consolidation in the parts market in recent years: Autoliv - hardly a household name - has made 11 acquisitions since 2000, the paper says, and I wouldn't be surprised if there weren't some others small enough to get under the radar. Another merger has just been approved: Commission approves acquisition of ThyssenKrupp Metal Forming by Corporación Gestamp, both suppliers to the automotive sector.The paper also points out that the four glass cartel members controlled 90 per cent of the market - and quotes an industry lawyer saying that it's  much easier to create a cartel when the market is concentrated in the hands of a few suppliers.

On top of all that, government aid to the motor industry during the GFC has attracted the attention of competition authorities, and globalisation of the industry has led the authorities to exchange information with increased urgency. There's also the simple fact that a car remains a big consumer purchase, so any dodgy behaviour in the market is likely to have a big impact on consumers' wallets.

It's timely, therefore, that the Office of Fair Trading has issued new guidance for businesses on how to comply with competition law, including a new film to replace the amazingly hammy one they did to introduce the new (1998) Act - which despite an update to include the cartel offence (the joins were very obvious) was distinctly long in the tooth. Having a compliance programme in place is an essential part of minimising the impact of the competition rules - not only by ensuring that you don't break them, but also by providing an opportunity to minimise penalties if it all goes wrong and you do fall foul of the rules, perhaps through the unauthorised actions of an employee. When I run awareness and compliance training courses (which I would naturally be very pleased to do for you, if the terms are right) I always stress to people that just the disruption to your business if you are investigated is enough to be worth investing a lot in avoiding.

Postscript: Automotive World reports that the Fair Trade Commission in Japan is investigating seven suppliers, including Denso.

Monday, 18 July 2011

MoT certificates to show historic mileage?

The Daily Telegraph reported on Saturday that the government is considering requiring historical vehicle mileage to be recorded on MoT certificates, in a bid to stamp out clocking. If the certificate showed you the readings from previous years, that would of course be a big help - unless it had been clocked in the first three years, when it didn't need an MoT test. Oh, and at the same time the government wants to make that four years.

At present, of course, clocking isn't illegal: it's only selling the car with the false mileage that is. This lacuna is allowing "mileage correction" businesses to flourish, and while they might have some legitimate purpose it's definitely outweighed by the less legitimate side of mileage adjustment, enabling others to pretend the mileage is less than it is. The only way to stop it completely is surely to outlaw the adjustment business altogether.

Monday, 11 July 2011

Dealing with scams

One of the banes of business life is the spurious but official-looking document that can so easily be signed and sent back - resulting in a claim that you now owe someone money for something you didn't realise you'd ordered. Back in the days when I worked at the CBI - the mid-eighties - it was directories: you thought you were verifying the information they claimed they were going to put in the directory (which would rarely ever get as far as being printed), but in fact you were signing an order for a very expensive entry. More recently, it's been dodgy data protection registration people, offering to attend to the simple matter of notifying the Information Commissioner's Office about your data processing activities for a substantial fee. In recent years there has been a boom in trade mark registration and renewal scams.

If you get any communication about a registered trade mark, treat it with caution. Especially if your trade marks are handled by a professional representative - if they are, all official communications should go to them, not to you. Before paying anything, consult your adviser.

There are plenty of other scams of various sorts going on apart from these. Documents come through the post, or by email, looking like something other than what they really are. We used to hope that the Unsolicited Goods and Services Act 1971 would help, and at least the contract would be unenforceable - but it's not in the scammers' business plans to get involved in legal proceedings, so we never got confirmation.

Now, the Business Protection from Misleading Marketing Regulations 2008 might be of assistance - especially following an unreported judgment of Mackie J in the High Court, in London Borough of Croydon v Austin Hogarth [2011] EWHC 1126 (QB), 5 April 2011 (unreported and not available on BAILII: thanks to the IPKat for drawing it to my attention). It involved what appeared to be a renewal form for a computer maintenance agreement which didn't actually exist. The judge decided they fell within the broad definition of "advertising" in the Regulations ("any form of representation which is made in connection with a trade, business, craft or profession in order to promote the supply or transfer of a product") and they were deceptive because they weren't what they were made to look like. The judge dismissed Mr Hogarth's explanation:
Mr. Hogarth denies that the agreement looks like an invoice. He says it does not. He says it states quite clearly at the top in big letters “Business Equipment Maintenance Agreement”, and that there is no way it can be mistaken for an invoice. He also says that it is misleading to rely upon: “If you would kindly fill in the number of machines on the enclosed document in the space marked with a cross, sign it and return to us within the next 5 days” bearing in mind the sentence before that. He points to other features which he says are likely to indicate that this is nothing more than, what he says it is, an invitation to enter into the contract. The question is whether that is misleading. In my judgment, it plainly is misleading. One must look at this in the context of apparently routine documents received during busy commercial life. The document appears to be one thing and is something quite different. That is an impression formed by the complainants, by the witnesses in this case, by the Advertising Standards Authority and by the OFT. It is not surprising that people have formed that view because, as I see it, it is blindingly obvious to anyone who has had any business experience that, when receiving a document of that kind, you would, unless you have checked it very carefully, take it to be something which it is not. You would sign a new contract thinking you were dealing with an existing company. The structure of the scheme was designed to mislead. There is no genuine commercial reason for the mailing to take the form it did. So, in my judgment, the communication is one that plainly deceives or is likely to deceive.
That, it seems, could cover a huge range of dodgy documents. It's no substitute for reading it carefully - but the whole point is, that's not always possible.

The Regulations don't give rise to a right to damages, only creating criminal offences - but if the contract be tainted with illegality, a civil claim should be possible.

Law suit over replica Batmobile

Over in the US, the maker of a Batmobile replica is facing threats of legal action from DC Comics. It's reported by the American Univeristy's Intellectual Property Brief blog, which wonders whether the publisher actually owns the rights in the design anyway, and comments on a few earlier replica cases. We've had similar issues in the English courts, though not for a while: and none of them ever made the law reports, as far as I know. I remember years ago Rolls-Royce Motor Cars Ltd used to get very excited about one John Dodd, who operated a spare parts delivery service using a vehicle known as The Beast which was connected with Rolls-Royce in that it was powered by a 27 litre Merlin engine. That Rolls-Royce's then company secretary was also called John Dodd was the source of some wry amusement. It didn't look anything like a Rolls-Royce, except for the grille, so they sued him. He drove it to court every day (it overheated and broke down in the London traffic), and I remember him turning up one day on horseback.

I also remember Ferrari threatening action over 250GTO replicas, which reproduced much more than just the grille: and the Caterham-Westfield dispute - as well as a meeting at the old Patent Office building, to which I took a delegation of SMMT members keen to obtain proper protection from replicas. The 250GTO was an interesting one, because although no-one was quite sure how many had been built it was definitely fewer than 50, so if the design were a copyright work (and it might well have come into the curious and somewhat inchoate category of works of artistic craftsmanship, having been formed out of sheet metal by Mr Scagliatti and a hammer) it would not be deprived of full copyright protection by reason of having been applied industrially. Unfortunately we never got beyond the stage of a conference with counsel ...

In many countries, making replica cars would probably be considered a form of unfair competition. We have no unfair competition law in this country, and there is little general enthusiasm for one, although it was one of the items on the agenda for that meeting at the Patent Office 25 years or so ago. The Paris Convention calls for such a law, and the UK signed it back in 1883 - the year in which Karl Marx and Richard Wagner both died, which sticks in my mind because it was also the year in which my old school was founded. I think it's important to keep unfair competition on the agenda, perhaps to try to develop passing-off law into an approximation of what we are supposed to have.

Clocking: at least regulate it

Motor Trade Insider calls for "a bit of common sense in the clocking debate". It strikes me as ridiculous that it should be necessary even to ask for this. Modern governments have a mania for regulation, whatever they might say, and this is an activity that cries out to be regulated. As MTI says, vehicle testers are heavily regulated - and as MTI also points out, much of the problem could be made to go away if only mileage information on the V5 were mandatory.

Friday, 8 July 2011

TDI not a good trade mark

A trade mark has to be distinctive to be registered, so there are a lot of signs in use in the motor trade that aren't good candidates for trade marks. The European Union's General Court, where appeals go to from decisions of the office about Community trade marks, recently confirmed in case T-318/09, Audi AG and Volkswagen AG v OHIM, that TDI is descriptive for ‘Vehicles and constructive parts thereof’. If the letters stand for ‘turbo[charged] diesel injection’ or ‘turbo direct injection’ they describe an essential characteristic of the vehicle and do not indicate the source of the goods.

Audi and VW recognised that descriptiveness would be a problem, so argued that through use TDI had come to identify their products only. Odd, given that it's also used for SEAT and Skoda models for starters - which of course are VW group companies but even so, that does rather dilute any disticntiveness argument and make it look more descriptive. Then there are Land Rover, Mercedes, Jaguar, Vauxhall, and goodness knows who else.

The court said Audi and VW had to show that it had acquired distinctiveness through use in all the Member States at the time the application was filed (2003, when there were 15). Advertising material was put in evidence which showed the TDI mark invariably used with other trade marks, such as the manufacturer's name. The court took the view, as it has done in previous cases, that where a sign that has no distinctive character is used alongside one that does, this does not prove that the public perceives the sign as indicating the commercial origin of the goods, so it had not acquired distinctiveness within the meaning of Article 7 (3) of the Community trade marks regulation and had rightly been refused registration. Other manufacturers using the TDI nomenclature don't have to worry too much - and the more they use it, the less suitable it will be as a distinctive sign.