This post was contributed by Professor James Devenney, Module Convenor for Commercial law.
Under the (now repealed) Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR 1999), a predecessor to Part 2 of the Consumer Rights Act 2015, a substantial body of case law emerged on the definition of a consumer under those regulations (Regulation 3 provided that a consumer was “any natural person who…[was]…acting for purposes which are outside his trade, business or profession”). For example, in Standard Bank London Ltd v Apostolakis [2002] CLC 933 the defendants (a lawyer and civil engineer) used their personal wealth to enter into a foreign exchange contract with a bank in Greece. One of the questions for the Court was whether or not they acted as “consumers” under the UTCCR 1999. Longmore J. held that the defendants were consumers for these purposes: “It is certainly not part of a person’s trade as a civil engineer or a lawyer … to enter into foreign exchange contracts.” Interestingly, it seems that the Greek courts in the same case adopted a different view: “…the Greek courts disagreed with the conclusion of Mr. Justice Longmore and considered the activity to be entrepreneurial” (Maple Leaf Macro Volatility Master Fund v Rouvroy [2009] EWHC 257 (Comm) at [209] per Andrew Smith J.).
Subsequently, in Overy v Paypal (Europe) Limited [2012] EWHC 2659 HHJ Hegarty QC surveyed the relevant case law and noted:
“Furthermore, where the individual in question is acting for more than one purpose, it is immaterial which is the predominant or primary purpose; and he will be entitled to the protection of the Directive if and only if the business purposes are negligible or insignificant.”
To what extent does this line of authority assist with the interpretation of the definition of consumer under the Consumer Rights Act 2015 (s2.)? One obvious distinction is that the definition under the Consumer Rights Act 2015 is wider in that it refers to an “…individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession” (emphasis added).
Moreover, the helpfulness of Standard Bank London Ltd v Apostolakis and Overy v PayPal (Europe) Ltd has, to some extent, been questioned by Oxford University Innovation Ltd v Oxford Nanoimaging Ltd [2022] EWHC 3200. In that case the Court held that undergraduates and DPhil students would generally be regarded as consumers under the UTCCR 1999 (the relevant law at the time of the relevant contracts). In so doing, the Court commented (at [242]ff) that cases such as Apostolakis and Overy, relied on cases under the Brussels Convention (on jurisdiction). This was, perhaps, understandable given the fact that the case law on the Unfair Consumer Terms Directive, which the UTCCR 1999 sought to transpose, was still developing.
However, the Court in the Oxford University Innovation Ltd case noted that it is possible to be a consumer under the UCTD but not a consumer under the Brussels Convention/Regulation (see Weco Projects ApS v Loro Piana [2020] EWHC 2150 (Comm)). This was justified (at [243]-[244]) on the basis of the differing purposes of these regimes:
“The UCTD is all about consumer protection and the UCTD therefore contains provisions of public policy which are regarded by the legislature as sufficiently powerful to strike down terms of contracts on the basis that they are unfair. Exceptions to “consumer” status for the purpose of this legislation are therefore to be construed narrowly…In contrast, the Brussels Convention/Regulation and the case law thereunder provides a fundamental jurisdictional rule that a defendant is to be sued in its place of domicile and uses the concept of a consumer as the basis for a limited exception to that general rule, to enable consumers to sue in their own country of domicile.”