Don’t forget – things you may have missed due to Covid-19

Brexit

The UK‑EU withdrawal agreement came into force at 11.00 pm (UK time) on 31 January 2020 (exit day) and a post‑Brexit transition period runs from exit day until 31 December 2020.

Whilst most EU law is firmly embedded in UK law significant change is expected at the end of the transition period, whatever the nature of any future UK‑EU relationship concluded (or provisionally applied) by then.

Large organisations with supply chains and workers from outside the UK face potential problems including the imposition of tariffs, additional customs processes and procedures, restrictions on the freedom of movement of people, and changes in exchange rates. Changes such as these could materially affect the commercial bargain underlying an organisation’s contracts.

Co‑operatives should assess whether a Brexit clause should be included in a new contract, define the trigger event (in itself, a complex task), and specify what consequences would flow from that. At best, specific consequences can be pre-agreed; more often, it may only be possible to agree a "trigger, negotiation, termination" framework.

Data protection and technology

The European Court of Justice (ECJ) has given its preliminary ruling that organisations can no longer rely on the EU‑US Privacy Shield as a valid data protection mechanism to transfer data from the EU to the US.

EU data exporters will need to take into account not only the destination of the personal data but also, in particular, any access by public authorities and the availability of judicial redress for individuals, to ascertain whether the European Commission’s existing standard contractual clauses are an appropriate mechanism for compliance with the law and they may need to put in place additional safeguards.

The EU and UK are currently negotiating an adequacy decision as the UK will itself become a third country at the end of the transition period, on 31 December 2020. Action may be required to ensure the continued flow of personal data between European Economic Area (EEA) personal data exporters and UK personal data importers after the end of the transition period. A conditionality clause can be included in agreements to ensure data flows can continue without interruption in such circumstances.

Increased transparency and consumer protections

The Competition and Markets Authority (“CMA”) has, through its market investigations, made clear that transparency is essential to comply with consumer protection law and businesses can no longer prey on their customers’ ignorance to secure a good deal.

The CMA has criticised both elderly residential care and funeral services for failing to provide clear pricing information, which is an essential tool for consumers to compare different packages and different suppliers. The CMA is also investigating the leasehold property market after concerns that escalating ground rents and potentially unfair sales practices mean that many homeowners have been mis‑sold properties.

Building on the CMA’s previous work on car insurance auto‑renewals and loyalty penalties, the Financial Conduct Authority (“FCA”) is proposing that insurers will no longer be able to charge existing customers more for their renewal, when compared with the same policy for new customers. The FCA is also considering the prohibition of ‘price walking’ where premiums for existing customers increase year on year.

Co‑operatives will not be surprised to see regulators championing transparent pricing and honest sales tactics but should take note of the increasing duty on businesses to proactively engage with potential customers; making them aware of less favourable terms, even if they don’t ask the questions. Those businesses which are reliant upon subscription and auto-renewing services, will need to review and potentially ‘upgrade’ their sales materials and contracts.