It has long been thought that fairness in European Consumer Law would be achieved by relying on information as a remedy and expecting the average consumer to keep businesses in check by voting with their feet. This monograph argues that the way consumer law operates today promises a lot but does not deliver enough. It struggles to avoid harm being caused to consumers and it struggles to repair the harm after the event. To achieve fairness, solutions need to be found elsewhere. Consumer Theories of Harm offers an alternative model to assess where and how consumer detriment may occur and solutions to prevent it. It shows that a more confident use of economic theory will allow practitioners to demonstrate how a poor standard of professional diligence lies at the heart of consumer harm. The book provides both theoretical and practical examples of how to combine existing law with economic theory to improve case outcomes. The book shows how public enforcers can move beyond the dominant transparency paradigm to an approach where firms have a positive duty to treat consumers fairly and shape their commercial offers in a way that prevents consumers from making mistakes. Over time, this 'fairness-by-design' approach will emerge as the only acceptable way to compete.

Table Of Contents



1. Introduction

I. The Search for Fairness

II. Origins of Theories of Harm in Competition Law

III. Using Theories of Harm in Consumer Law – A Natural Evolution

IV. Harnessing the Use of Economics in Consumer Law

V. Contents

2. The Limitations of Consumer Law in Tackling Consumer Harm

I. Introduction

II. Limitations in the Use of Information as a Mainstream Transparency Approach

III. Limitations of the Definition of the 'Average Consumer' Used as a Reference Point for Protection

IV. Implementation of the 'Average Consumer' Standard under the Unfair Commercial Practices Legislation

V. Protecting 'Vulnerable' and 'Disengaged' Consumers

VI. Limitations Found in Unfair Terms Legislation

VII. The Enforcement Framework in the UK

3. The Limitations of Competition Law in Tackling Consumer Harm

I. Introduction

II. Ex-Post Enforcement against Exploitative Abuses

III. The Case for a Holistic Approach under an Ex Ante Administrative Market Regime

IV. The Enforcement Framework in the UK

4. The Economic Framework Underpinning Consumer Theories of Harm

I. Introduction

II. Consumer Surplus

III. The Economic Case for Intervention in Consumer Markets

IV. Concluding Remarks

5. Archetypal Consumer Theories of Harm

I. Introduction

II. The Scam

III. The Lemon

IV. The Shock

V. The Subsidy

VI. Concluding Remarks

6. Applying CToHs – Case Studies

I. Case Study on the CMA Market Inquiry into Retail Energy

II. Case Study on Bank Current Accounts and Savings Accounts

III. Case Study on Claims for Compensation in the Airline Industry

IV. Case Study on Allocated Airline Seating

V. Case Study on Fertility Add-Ons

7. Fairness by Design: The Introduction of a Positive Duty to Trade Fairly

I. Introduction

II. Justifications for Adopting a More Prescriptive Standard of Conduct for the Protection of Consumers

III. Introducing a Positive Duty to Trade Fairly

IV. The Impact of a General and Positive Duty to Trade Fairly

V. Conclusion