With the fortunes of the Samsung Galaxy Note 7 reaching a low point after airlines banned passengers from taking the smartphones onboard, the company’s customers have probably reached the end of their tether.
However, how painful the consumer experience is — and whether you can secure compensation or a remedy — will depend on where you live and how you made your purchase. Samsung has had positive comments for being proactive in stopping sales of the Note 7 and offering to replace them with other Samsung models or even alternative brands. In other cases of product failure, however, there is often a baffling series of barriers to be crossed.
“I do a lot of international product liability work and there are two completely different experiences between the US and the rest of the world — which, in practice, means the UK and Europe,” says Shane Sayers, of Kennedys. “In the UK, if there’s a problem with a product then you get an offer to fix and that’s all. In the US you will get much more in terms of compensation and you will get it much faster.”
As Russell Williamson, of Bird & Bird, points out, in America the consumer is “king” and this is embodied in the vigorous actions of its regulator, the Consumer Product Safety Commission. This is seen most vividly in the difference in approach between the UK and the US in how the VW emissions scandal is being handled. In the US the company has allocated $15 billion (£12 billion) to buy back the cars and give compensation — there is no such prospect in the UK.
“There is a much more aggressive attitude to consumer protection in the US,” says Jonathan Bellamy, a barrister at 39 Essex Chambers. “America has a history of class actions, tort claims and charges being laid for products that have been misdescribed. There have even been suggestions of a fraud claim against VW.”
In the UK the company’s view is that no laws have been broken, the vehicles are not unsafe and there is no impact on their residual value (ie, when resold). All that is being offered is a recall to take corrective action — but even that process is running way behind schedule.
Patience in government may be evaporating — Department for Transport officials have said that they find it “unacceptable” that Volkswagen has dragged its heels for so long — but any action needs to have a legal and institutional basis. That is why, although Slater and Gordon reports that it has thousands of VW owners registered and ready to sue VW, the manufacturer’s lack of candour about the impact any fix has on engine performance is frustrating and delaying consumers’ ability to get redress. “What we are waiting for is some hard research results and expert evidence of loss of performance — such as poorer MPG [miles per gallon] — by the vehicles subsequent to remedial work,” says the firm’s Gareth Pope. “Once that surfaces we’ll be in a position to take action in conjunction with other claimant firms.” So unless the government does something dramatic, we could be in stasis for some time.
“There are no personal injury issues and the company is still firmly denying liability,” says Thomas Jervis, of Leigh Day. “Meanwhile, product recall in the UK is a shambles.”
Whether the British product recall system can be improved is another issue. Last year the consumer rights campaigner Lynn Faulds Wood was appointed by the government to lead an independent review of how it works and how it might be improved. A number of recommendations were made, including creating a centre of excellence to co-ordinate operations and the setting up of an “official trusted website” as a source of information. The government response was warm in words from Anna Soubry, at the time minister for small business, industry and enterprise, but, in effect, Jervis says, the recommendations were kicked into the long grass.
Where some progress has been achieved, however, is in the Consumer Rights Act 2015, which has simplified the legal landscape by bringing together in a single place most of the relevant consumer legislation, says Jenna Rennie, of Bird & Bird. Much of the motivation for this came from the EU. “There is a growing move to empower consumers both here in the UK and the EU,” Rennie says, “through the introduction of more straightforward legislation and use of online alternative dispute resolution procedures. Once out of the EU that movement may potentially be at risk, although we wouldn’t expect the approach to change significantly.”
Yet legislation and regulation is not the only way forward. The move to allow passengers to claim compensation for delays of more than 15 minutes (rather than 30 minutes) — recently announced by the Department for Transport on Govia Thameslink Railway services (but likely to expand to other networks) is believed to have been achieved via changes to the rail franchise.