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Proposals
U.S. Federal Trade Commission Proposal for OAS
Model Law on Monetary Redress for Consumer Transactions
* The United States supports the inclusion of a consumer
protection topic for CIDIP-VII. The U.S. believes that
strong and effective consumer protection laws and
institutions can contribute to consumer welfare and economic
development in the OAS countries.
*
The U.S. recognizes that there is a need to develop
mechanisms to protect consumers who have suffered economic
injuries from businesses, particularly for injuries that
have a relatively small monetary value. Therefore, the U.S.
proposes that the CIDIP process focus on encouraging
mechanisms for monetary consumer redress.
*
Specifically, the U.S. proposes that the CIDIP focus on
developing a model law on mechanisms for consumers to obtain
monetary redress. There are many possible redress routes
including judicial mechanisms such as small claims
tribunals, administrative adjudication of small claims, and
private, associational, and governmental (or parens patriae)
collective court actions. A model law could cover some or
all of these options.
*
For example, a model law could contain a basic statement
regarding the right to monetary redress and the availability
of mechanisms for redressing consumer complaints. It could
contain a general declaration to the effect that: Monetary
redress for economic injuries to consumers should be
available through administrative or judicial mechanisms for
adjudicating individual consumer claims for low monetary
value and through collective or representational actions
filed in courts or administrative or other appropriate
tribunals.
*
With respect to small claims procedures, a model law could
set forth a few basic principles for a low-cost, efficient,
and expedited small claims procedure. It would not require
member countries to set up special small claims courts but
instead leave the forum for the small claims procedure up to
the individual country (e.g., a specialized judicial court,
administrative tribunal, or national consumer protection
agency).
*
With respect to collective or representational actions, the
model law could specify the types of entities with the
ability to bring collective or representation claims seeking
monetary redress, which could include governmental entities
or attorneys representing a class of consumers with common
claims. The model law could specify that collective action
procedures are appropriate vehicles for obtaining monetary
redress for individual consumers.
*
The model law also could include a provision clarifying that
monetary redress judgments obtained in collective actions
brought by governments should not be considered penal or
public in nature and should be enforced based on rules for
enforcing private international law judgments. The
U.S.-Australian Free Trade Agreement contains a similar
provision.
*
The topic of redress mechanisms already has attracted
attention from the OAS member states and through the Forum
of Latin American Consumer Protection Agencies. Indeed, many
Latin American and South American consumer protection
agencies have begun to explore mechanisms for consumers to
obtain monetary redress. Some countries, e.g., Mexico, have
instituted small-claims type procedures within the
administrative agency context. Other countries are
exploring collective action mechanisms. For example, Chile
recently passed a law that gives the government the ability
to bring collective actions on behalf of consumers. Brazil,
which pioneered collective actions in South America, is
currently conducting feasibility studies on expanding its
class action procedure. Mexico=s consumer protection agency,
Profeco, already has the ability to bring collective actions
on behalf of consumers.
*
This topic has recently drawn a great deal of attention in
other countries as well. The 30 member states of the OECD
are currently studying consumer redress mechanisms, and the
OECD=s Committee on Consumer Policy will host a workshop on
this topic in Washington, D.C. in April 2005. Mexico is
participating in this project. The OECD meeting could
generate some information that might provide useful
background for the CIDIP meeting.
*
A model law on consumer redress would complement the
proposal for a consumer choice of law convention, by
focusing on practical mechanisms for redress.
*
Inclusion of consumer-oriented topics would achieve a
balanced agenda, together with an economics-based topic such
as that proposed by the United States and supported by a
number of OAS members to enhance economic development and
trade throughout the Americas. |
