Consumer's International
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Statement on the draft Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters

Ottawa, February 26, 2001

Consumers International , the worldwide federation of consumer organisations, believes that in order to build and maintain consumer confidence in electronic commerce, consumers must have access to their own courts for legal redress regarding cross-border transactions. In particular,

Article 7 should be retained

Article 7 is an essential component of any international Convention on Jurisdiction. By ensuring that consumers are not denied access to their own courts in the event of unresolved disputes with foreign merchants, it maintains current standards of justice and recognizes the power imbalance between repeat business players and one-time buyers. The guarantees inherent in Article 7 are essential for consumer trust and confidence in cross-border electronic commerce.

Furthermore:

Online vendors can target their sales to specific jurisdictions Online vendors can restrict the jurisdictions in which they do business &emdash; indeed, they do now. Where a vendor cannot determine a buyer's location with certainty, the vendor can simply require a declaration of location by the buyer. The benefit of Article 7 would not be available to buyers making fraudulent declarations.

Cross-border vendors can take precautions against non-payment by consumers It is appropriate that consumers be entitled to defend lawsuits in their own courts. The right to defend in a foreign court is meaningless to ordinary consumers given the cost of exercising that right. Moreover, businesses have a variety of means available to them for avoiding loss due to consumer non-payment, and normal business practice is to ensure payment in advance of shipping.

Forum selection clauses in consumer contracts should never be given effect Forum selection (choice of court) clauses imposed on consumers in standard form, "take it or leave it" contracts, should never be enforced. For consumers, such forum selection is entirely one-sided and non-negotiable. The consumer is given no choice. For this reason alone, such clauses should not be effective.

There should be no "prior resort" conditions for the application of jurisdiction under Article 7 It has been suggested that the application of Article 7 should be dependent upon prior resort by the consumer to out-of-court dispute resolution (ADR), where requested by the vendor. Consumers International supports the availability of voluntary, independent ADR mechanisms for consumers in disputes with businesses. However, we oppose linking the availability of court redress to the prior use of ADR for the following reasons:

It is unnecessary. Consumers will use good ADR options if they are made available

It would dilute the incentive for businesses to use good ADR systems, so as to attract consumers voluntarily

It would prejudice consumer rights to redress via the courts, by interfering with class action rights and limitation periods

It is premature: there is no system in place to ensure the fairness, independence, and competence of private ADR systems, and none appears imminent (See Consumers International, Disputes in Cyberspace, November 2000, for a recent global survey and analysis of online B2C ADR).

It could be abused by unethical businesses who force consumers into biased or unfair ADR

It could end up costing consumers more, without any guarantee of fairness or competence

It could damage consumer trust and confidence in e-commerce, if consumers are forced against their will to engage in a private ADR process before being able to access the publicly funded court system.

Jurisdictional rules regarding consumer contracts should not be left to national law It has been proposed that the issue of whether consumers can sue be left to national law, with the resulting judgments therefore not enforceable under the Convention. Consumers International strongly opposes any such "national opting-out" of Article 7. The rules in question are matters of basic fairness, common sense and justice that transcend national boundaries. Consumers worldwide deserve access to justice in practice, not just in theory.