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Monday, 6 February 2012

Where's the beef (again)?

America is a difficult place to understand sometimes. Well, most of the time. An extraordinary degree of importance is attached to TV ads showing during the Super Bowl, and this year a General Motors ad (here, on YouTube: embedding doesn't seem to work)  has caused a furore. Bear with me - it does have a legal aspect.
The commercial plays on the Mayan calendar's prediction that the end of the world will come in 2012. According to the GM ad, surviving the end of the world (which, when you think about it, is a pretty pointless thing to do) depends on driving a Chevrolet Silverado.
Ford took exception, because the guy who didn't make it to the meeting place after the apocolypse drove the Ford competitor, the F-150.  The F-150? Isn't that the Formula One car? Or am I confusing it with the Ferrari pick-up? Either way, Ford seems to have suffered another corporate sense-of-humour failure: according to GM, the ad is an over-the-top spoof with "the devastation and destruction predicted to occur this year by the Mayan calendar [including] giant attack robots, meteors and frogs falling from the sky." GM's Global Chief Marketing Officer Joel Ewanick said:
We stand by our claims in the commercial, that the Silverado is the most dependable, longest-lasting full-size pickup on the road. The ad is a fun way of putting this claim in the context of the apocalypse.
The ad implies that the Silverado is more durable than the F-Series pickups, with Ford countering that there are more of its trucks on the road with at least 250,000 miles on them. Ford's lawyer has written to GM demanding that they "immediately cease and desist from making any unsubstantiated and disparaging claims regarding Ford's pickup trucks."
GM, still in the spirit of the ad, claim "we can wait until the world ends, and if we need to, we will apologize," continuing (probably not believing their good fortune at the additional publicity being generated by their rival):
In the meantime, people who are really worried about the Mayan calendar coming true should buy a Silverado right away.
Now (to pick up the legal theme in this story again), different countries have different approaches to comparative advertising. It almost invariably involves the use of a competitor's trade mark: in the Silverado ad, the F-word is used - and I don't mean Ferrari's parent ... So there is a prima facie trade mark infringement, except that most laws allow you to use your rival's trade mark to indicate its products. In the UK, it would have to be in accordance with honest practices in industrial and commercial matters and not take unfair advantage or be otherwise detrimental - broadly speaking it would have to be fair. You don't have to study American advertising practice for long to spot that they are rather more liberal over there: which makes it even odder that Ford should have reached for its lawyers over something like this - giving GM the oxygen of publicity even though it seems they had no intention of going further.
In a rational world, Ford's remedy would be to take the corresponding advertising slot next year and come up with something as amusing and memorable. If, that is, there is a next year.

Sunday, 5 February 2012

Toyota denies Sunday Times allegations

The Sunday Times has published a story accusing Toyota GB and its dealers of acting "unethically" towards customers over warranty claims. You can see the headline on the public part of the website, but the detail is behind the paywall. It seems from other reports that the paper alleges that Toyota prevented dealers from fixing defects under warranty unless they related to safety and reliability or had initially been raised by the customer themselves. Anything the dealer found during routine servicing or inspection could, the Sunday Times asserts, be ignored. The Fleet Street Blues blog gives the following (presumably) extract from the paper's report:
Toyota’s warranty policy and procedures manual, a secret document seen only by dealers, states that “the warranty should address only those issues raised directly by a customer”, unless they are a direct risk to safety or reliability.
As a result, defects such as the clicking Yaris steering column, heavy clutches, corroded wheels and faulty wing mirrors cannot be fixed under warranty unless the customer reports them.
Dealers who are caught out repairing these “cosmetic” faults under warranty without a customer complaint can be fined up to four times the cost of the work.
Toyota GB, unsurprisingly, responded with a statement in which they said:
All manufacturing defects, however identified, are covered by the Toyota warranty.
Toyota dealer technicians can and do bring to the attention of customers any type of fault (including purely cosmetic faults), regardless of the cause, which they find on a vehicle, whether or not previously raised by the customer.
The company also said it “completely refutes the accusation that it or its dealers act unethically or seek to deceive customers by failing to notify them of non-safety or reliability manufacturing defects whilst a vehicle is under warranty”. I'm not sure anything has been refuted yet - but clearly they are denying it. I would give you a link to the statement, as the Sunday Times apparently does (behind the paywall!), but it doesn't seem to be on Toyota's website: you can read about it on Auto Retail Network.

The suggestion in the Sunday Times story seems to be that dealers can postpone rectifying some faults until the car has come out of warranty, which does sound a bit dubious, but to call the alleged (and denied) practice in general "unethical" strikes me as over-the-top. And what's so sinister about the document setting out the warranty policy being "secret"? There are reams of documents governing the manufacturer-dealer relationship which are not disclosed to the public, and that's entirely as you'd expect.

No criminal prosecutions for truck cartel (but that's not the end of the story)

Some months ago (in volume 12 number 5, to be precise) we reported that the OFT had launched an investigation into allegations of price-fixing in the truck market, and as part of that exercise an individual had  been arrested. In December the OFT announced that it was not going to charge him:

The OFT commenced a criminal cartel investigation under the Enterprise Act 2002 into suspected cartel activity in the UK involving commercial vehicle manufacturers in September 2010. Following a thorough investigation it has been determined that there is insufficient evidence for any individual to be charged with the cartel offence. Accordingly, that case has been closed. 
The OFT then - ominously? - adds:
The OFT's Competition Act investigation is continuing.

Damages after police pursuit

The Press Association reports a "substantial" out-of-court settlement between Gwent Police and a  man whose car windows two of their officers smashed. The 73-year-old retired businessman had reportedly taken off in his Range Rover while he was being issued with a fixed penalty notice for not wearing his seat belt, and was pursued by the police who stopped him and smashed the windows.

The police video of the 2009 incident had been uploaded to YouTube (see below), providing useful evidence in the claim - although it doesn't look much different from the way the cops apprehend offenders in any number of true-life TV programmes you can see, when they are forced to pursue someone who won't co-operate.
The driver was found guilty of not wearing a seat belt, failing to stop for a police officer and having illegally tinted car windows. He also admitted having a registration plate which did not comply with regulations, but was cleared of failing to stop after an accident. He was fined a total of £235 and ordered to pay £300 towards prosecution costs at Caerphilly Magistrates' Court.

The Independent Police Complaints Commission investigated the incident, but a disciplinary panel made up of officers from another force cleared the two Gwent officers, finding that their actions were justified in the circumstances.

Deputy Chief Constable Jeff Farrar stressed that the police did not admit liability, but "contesting the matter further would have incurred substantial legal costs if the case had gone to court. Therefore ... a decision was made to settle the matter out of court on financial grounds." Reports suggest that the payment made to the driver, who claimed for post-traumatic stress disorder, is over £20,000. This was in addition to more than £8,000 for damage to his vehicle (how many windows were broken?), and "all reasonable" costs of the legal action. We must be missing something here, between alleged over-reaction on the part of the police and the driver taking off after being stopped by the police in the first place ...

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Saturday, 4 February 2012

US: penalties imposed for price-fixing by electrical components suppliers

We have reported the increasingly widespread investigations by competition authorities into price-fixing in the components industry in recent months. Now the U.S. Department of Justice, which was quoted recently as saying that this investigation was the biggest it had undertaken, has announced that Yazaki and Denso, two Japanese automotive electrical components suppliers, have agreed to plead guilty to charges of  multiple price-fixing and bid-rigging conspiracies in the sale of parts to automobile manufacturers in the US.
They will pay a total of $548m in criminal fines (including the second-largest ever criminal fine under the Sherman Act), and a number of executives will serve time in prison.

Motor Insurance Regulation Bill

A private member's bill introduced by Jack Straw, no less, the aims of which are described officially thus:
A Bill to reform the regulation and operation of the market in motor insurance, and specifically, to ban the payment of referral fees; to establish new standards relating to the evidence required and damages payable for whiplash; to reform the Pre-Action Protocol for Personal Injury Claims in Road Traffic Accidents; to set requirements in respect of risk pricing for personal injury claims; and for connected purposes.
It was due to have its second reading in the Commons on 20 January, but didn't. It is not known when it might (or, indeed, I suppose, whether it will at all). A pity, because it sounds sensible - unless the government is picking up on its aims in its own legislation.

Smoke-free Private Vehicles Bill

This Bill to make provision for a ban on smoking in private vehicles where there are children present, by means of an amendment to the Health Act 2006, was introduced by Lord Ribeiro, read a first time and ordered to be printed on 25 January. If by some miracle it were passed, it would no doubt become another piece of legislation to be routinely ignored by at least a substantial minority of the population (like the legislation on using mobile phones and on smoking in vehicles which constitute workplaces). Laws which are widely flouted are not good laws, and they tend to bring the law in general into disrepute, so however worthy the aim I can't get excited about it. The capacity of the law to force social change is small, and diminishing.

Thursday, 2 February 2012

Motor Law's 23rd annual conference

Having a clear-up in my study, I came across some old conference notes which enabled me to work out that this year's Motor Law conference will be the 23rd, which seems like an awful lot. And we have an excellent programme. The line-up currently looks like this:
  • Axel Bierer of the European Commission on the block exemption
  • Brian Spratt of ADF and the Right to Choose Campaign on aftermarket aspects of the block exemption
  • Gene Brockland, of Herzog Crebs (St Louis, MO), Motor Law's US correspondent, on dealer protection the American way (courtesy of some clever telecommunications link-up)
  • Chris Mason, managing director of Motor Codes Limited, on, well, motor codes
  • Iain MacDonald, barrister, of Gough Square Chambers, a very popular speaker when last he came to the conference, on the OFT's new guidance on intermediaries and credit brokers - which is creating a lot of worry in the motor trade
  • David Hertzell, Law Commissioner, on the proposed Common European Sales Law
  • Rhiannon Joseph, a colleague from CJ Jones Solicitors LLP, on employment law implications of social networking
  • Adrian Watts, solicitor, on developments in consumer law
I have a promise from an old friend, a TV pundit on motor trade matters, that he'll come along to talk after lunch if his filming schedule allows - more, I hope, later. And a few other things to shoe-horn into the schedule.

We reserve the right to change things if necessary, of course.