New laws affect solicitors' electronic services

A look at the implications for law firms following the introduction of the Electronic Commerce (EC Directive) Regulations earlier this year

The Electronic Commerce (EC Directive) Regulations 2002 (SI No.

2013) came into force on 21 August 2002, and will have an immediate impact on law firms that offer on-line services, provide electronic newsletters, use SMS text messaging to provide, for example, conveyancing updates and generally advertise and market though their Web sites.

The Department of Trade and Industry (DTI) has published guidance notes for all businesses on how the regulations may impact on them.

The regulations apply to any business which:

l Sells goods or services to businesses or consumers on the Internet or by SMS or e-mail;

l Advertises on the Internet or by SMS or e-mail; or

l Stores or conveys electronic content to its customers or provides access to a communication network.

The regulations do not apply to business conducted via fax or voice telephony.

The key features of the regulations are:

l On-line selling and advertising is subject to the laws of the UK if the trader is established here;

l On-line services provided from other member states may not be restricted by UK law/regulations;

l There are exceptions.

In particular consumers must continue to enjoy at least equivalent rights to those they enjoy in their own territory.

It is open to parties to choose to contract under another applicable law if they wish;

l Recipients of on-line, e-mail and SMS services must be given clear information about who the trader is, the nature of any commercial communications, and how an on-line transaction can be completed.

Such information may be made available through another channel (for example, as SMS capacity is limited, the relevant information may be made available on the service provider's Web site);

l Internet service providers are exempt from liability for the content that they convey or store in certain circumstances;

l Changes have been made to the power of enforcement authorities such as Trading Standards and the Office of Fair Trading.

Many solicitors may already satisfy many of the regulations, provided they are already complying with the Consumer Protection (Distance Selling) Regulations 2001.

Distance selling

There will be an effect on solicitors' Web sites that supply services (for example, wills) to consumers directly over the Internet.

Prior to the conclusion of the contract, the supplier shall inform the consumer (in a clear and comprehensible manner, ensuring that his commercial purpose is made clear) of:

l Its identity and, where payment in advance is required, its address;

l A description of the main characteristics of the goods/services;

l Prices (including taxes);

l Delivery costs (where appropriate);

l Arrangements for payment, delivery or performance;

l The right to cancel;

l The period for which a special offer or price remains valid (for example, two-for-the-price-of-one); and,

l The minimum duration of the contract (for example, where items are stored).

Prior to the conclusion of the contract or during the performance of the services, the following additional information needs to be supplied (in writing or in another 'durable medium'):

l The various conditions and procedures for cancelling (including inability to cancel once the performance of the services has begun with the consumer's agreement); and,

l The geographical address of the supplier to which complaints may be addressed.E-commerce

Again, there will be an effect on law firms' Web sites.

The DTI recognises that legal services can fall within the definition of an 'information society service' and, in its guidance, suggests that, by offering on-line information, lawyers will be caught by the regulations.

Law firms would need to make the following additional information available in a form and manner which is 'easily, directly and permanently accessible' on the Web site:

l The fact that they are regulated by the Law Society of England & Wales (including the Law Society's details);

l Reference to the 'applicable rules' and a means to access them.

(A possible form of words would be: 'The 'applicable rules' are the rules and principles governing solicitors' conduct - see the on-line guide at: www.guide.lawsociety.org.uk which includes updating material in chapter 32'); and,

l The firms' VAT number.

There will also be an effect on electronic newsletters and SMS.

These would fall under the definition of 'commercial communications' and would need to be clearly identifiable as such.

Furthermore, it is probable that certain inter-personal e-mails seeking business from current/prospective clients would be deemed the same and should be clearly identified as 'commercial communications'.

There will be additional effects on solicitors' Web sites supplying services to a consumer.

The following additional information should also be made available in a form and manner that is 'easily, directly and permanently accessible' (although this could become difficult if firms go down the SMS route - a pointer to a Web site with the details would probably comply):

l Name of service provider;

l Geographic address and e-mail address of service provider; and,

l Where the supplier is subject to authorisation (for example, if doing certain investment business), the details of the supervisory body.

Furthermore, the supplier must state clearly and unambiguously whether prices are inclusive of VAT or not.

Likewise, the following must be provided in a clear, comprehensible and unambiguous manner:

l The different technical steps the consumer needs to follow to conclude the contract and the point at which the consumer will commit themselves;

l Whether the contract will be filed by the service provider and whether it will be accessible; and,

l The technical means of identifying and correcting input errors prior to placing an order.There are additional requirements of the service provider: Firstly, all terms and conditions must be downloadable and printable.

Secondly, the service provider must acknowledge receipt of any order, without undue delay, by electronic means and, finally, they make available to the consumer the ability to identify and amend errors in the order.

Any contract that does not comply with these provisions can be cancelled and the provisions will be deemed unenforceable.

The consumer can demand compensatory damages (to put them back in their original position).

Any commercial communications offering a promotional offer must ensure that any conditions to qualify for it are easily accessible, clear and unambiguous.

Stop-now orders will be used by the Director General of Fair Trading where the collective interests of consumers is harmed by a service provider being in breach, but these will not come into force until October this year.

l The regulations are now available on-line at: http://www.legislation.hmso.gov.uk/si/si2002/20022013.htm

l The DTI's guidance on the impact of the regulations is available at: www.dti.gov.uk/ cii/ecommerce/europeanpolicy/ ecommerce_directive.shtml #guidance