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OFT/easyCar Distance Selling Regulations case referred to European Court of Justice

29 July 2003

The dispute between the OFT and easyCar regarding the application of the Distance Selling Regulations (DSRs) has been referred to the European Court of Justice. The High Court granted the reference on 21 July following a joint application from the OFT and easyCar.

The OFT had asked easyCar to comply with the DSRs after receiving a number of complaints about easyCar's refusal to allow consumers to cancel car-hire contracts and get a refund.

The DSRs, introduced in 2000, implement a European Directive (Distance Selling Directive 97/7/EC). The regulations provide extra protection for consumers purchasing goods and services from a business by telephone, internet or other 'distance' means. They require businesses to give consumers certain information and give a seven day 'cooling-off' period in which consumers have the unconditional right to cancel. 

The Regulations do not apply to 'contracts for the provision of transport services' on a specific date or within a specific period. This reflects a provision of the Directive and easyCar believe they benefit from this exemption. In particular, easyCar maintain that car hire is in law a 'transport service' which is exempt from the cancellation provisions of the DSRs and that therefore they do not have to give a cooling off period.

The OFT accepts that the exemption for transport services covers services provided by train operators, bus companies and airlines. But the OFT view is that self-drive car hire is not in law a 'transport service' and that easyCar's customers are entitled to the protection offered by the DSRs, including the 'cooling-off' period.

The Regulations derive from the Distance Selling Directive which, like other European legislation, must be applied consistently throughout member states. There is currently no European case law on this particular provision of the Distance Selling Directive, i.e. the scope of the exclusion for transport services. It is on this issue that the reference to the European Court of Justice is required. The reference will achieve certainty on this point for car hire operators and regulators throughout the EU. It is expected that judgment may take up to two years.

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