The Services Regulations: What they mean to you

Summary of the “Guidance for Business on the Provision of Services Regulations 2009”

In Brief

The Regulations will make it easier for service providers to obtain relevant authorisations and trade across the EEA. They also require a service provider to make certain information available to its customers, deal with complaints in a specific way and comply with non-discrimination principles.

This summary gives a précis of the “Guidance for Business on the Provision of  Services Regulations 2009” provided by the Department for Business, Innovation & Skills and includes direct extracts from the guidance notes.  There are references throughout to the pages where the fuller details can be found on individual sections. You can access the guidance notes directly, to read the full text or refer to the pages referenced in this précis, here.

What does the Services Directive do?

The Directive applies in relation to the EEA states of Iceland, Liechtenstein and Norway in addition to the EU Member States. The Services Directive requires each EEA state to:

• remove unjustifiable or discriminatory requirements affecting the setting up or carrying on of a relevant service activity;
• set up a single point of contact enabling service providers to apply and pay for authorisations (to offer or provide services) online;
• provide for competent authorities in different states to co-operate, including by sending requests for information through an internal market information system, reducing the burden on services providers;
• require service providers to make certain information available for recipients of their services;
• set up a portal to enable consumers to find out what their rights are in each country of the EEA, thus increasing confidence in using services.

To whom do the Regulationsapply?

The Regulations will apply to you if you provide relevant services in the UK. A ‘service’ is defined as “an economic activity normally provided for remuneration and which is not a contract for employment. This activity could be industrial, or commercial in nature, a craft or the activity of a profession.” See page 6 for examples.

This covers all business and consumer services provided for remuneration except:

• Financial services (including credit, insurance, pensions, investments);
• Electronic communications services and networks;
• Services in the field of transport (except car rental, removal services, MOT, funeral services, aerial photography);
• Temporary work agencies;
• Healthcare;
• Audiovisual (e.g. cinemas and broadcasting);
• Gambling;
• Social services provided by the State or on a charitable basis;
• Private security; and
• Notaries & bailiffs appointed by an official act of government.

Ancillary services associated with the manufacture and sale of goods are included, e.g. after sales service or customer advice.

Activities associated with the exercise of official authority such astaxation and labour law are excluded.

Services of general economic interest are excluded including those in the postal, electricity and gas sectors, water distribution and supply, and waste treatment services.

Further details of the exclusions can be found on pages 6 -8 of the guidance notes.

What information does a service provider have to make available?

The requirements of the regulations are generally considered to be already common practice and hence should not be burdensome. They do not replace existing requirements such as the Consumer Protection from Unfair Trading Regulations 2008 (SI. 2008/1277) or other existing applicable legislation although there will be amendments to some existing legislation (see below).

You have to make the following information available to recipients ofyour services:

• The name of your business.
• Your legal status and form.
• The geographic address at which you are established and details by which you may be contacted rapidly and communicated with directly e.g telephone, text, email.
• If you are registered in a trade or other similar public register, the name of that register and your registration number.
• If you are subject to an authorisation scheme in the UK, the particulars of the relevant competent authority.
• If you are subject to an authorisation scheme in another EEA state, the particulars of the relevant authority, or the point of single contact in that state.
• If you exercise an activity which is subject to VAT, the identification number.
• If you are carrying on a regulated profession, any professional body or similar institution with which you are registered, the professional title and the EEA state in which that title has been granted.
• The general terms and conditions, if any, that you use and the applicable law.
• The existence of an after-sales guarantee, if any, not imposed by law.
• The price of the service, where a price is pre-determined by your business for a given type of service.
• The main features of the service, if not already apparent from the context.
• If you are subject to a requirement to hold professional liability insurance or a guarantee, information about your cover and, in particular, the contact details of the insurer or guarantor and the territorial coverage.

See pages 9 – 11 for examples.

How does a service provider have to make the information available?

The information must be provided as follows:

• supply it to the recipient on your own initiative; or
• make it easily accessible to the recipient at the place where the service is provided or the contract concluded, for example, at your premises; or
• make it easily accessible by the recipient electronically by means of an address you supply, for example, by providing the exact address of where the information can be found on a publicly available website; or
• include it in any information documents that you supply to the recipient, which set out a detailed description of the service you provide.

The information must be clear and easy to understand and must also be given in good time before the contract is concluded or before the service is provided when there is no written contract. This is so that the recipient has enough time to digest the information and change their mind about entering into the contract if they so wish.

What additional information do service providers have to make available?

If you are subject to a code of conduct or are a member of a trade association or professional body that gives access to a non-judicial dispute resolution procedure, then you should inform the recipient, mention it in any information document that describes your service in detail and specify how to access detailed information on the procedure.

You must also make available contact details where recipients can request information or make a complaint – this must include a telephone numberand one or more of a postal address (also include your official address ifdifferent to the postal address), fax number or e-mail address.

If the recipient of the services asks, the service provider must also supply the following information:

• Where the price is not pre-determined by your business for a given type of service, the price of the service or, if an exact price cannot be given, the method for calculating the price so that it can be checked by the recipient, or a sufficiently detailed estimate.
• If you are carrying on a regulated profession, a reference to the professional rules applicable in your EEA state of establishment and how to access them – so recipients can easily find the rules, for example, on a website.
• Information on any other activities carried out by you or your business, which are directly linked to the service in question and on the measures taken to avoid conflicts of interest. That information should be included in any information document in which you give a detailed description of your services.
•   Any codes of conduct to which you are subject and the websites from which these codes are available, specifying the language version available.

 How must service providers deal with complaints?

You must provide contact details as specified above.

You must respond to complaints as quickly as possible.

You must make your best efforts to find a satisfactory solution to genuine complaints, i.e. this does not apply to vexatious or malicious complaints. If you have made your best efforts to resolve a complaint in a way that a recipient could reasonably be expected to be satisfied, you do not have to take further action if the complaint is made repeatedly.

See page 13 for further details.

What are the restrictions on discrimination?

In your general conditions, which you make available to the public, you cannot discriminate on the grounds of nationality or place of residence. For example, you cannot offer different terms and conditions, provide a different standard of service, or refuse to offer a service, on the sole basis of place of residence, which can refer to a town, region, or country. Existing obligations already prevent discrimination on grounds of nationality. The duty applies where the customer is an individual but not where it is a legal person (such asa company).

However, you will be able to retain different conditions where these are justified by ‘objective criteria’. ‘Objective criteria’ are objective reasons which justify your offering different conditions according to the recipient’s place of residence. It will be for you to determine what you consider to be objective criteria based on your own individual circumstances, but they could include:

a) additional costs, incurred because of

i) the distance involved; or

ii) the technical characteristics of the provision of the service;

b) different market conditions, such as higher or lower demand influenced by

i) seasonality;

ii) different holiday periods;

iii) pricing by different competitors;

c) extra risks linked to rules differing between EEA states;

d) the absence of sufficient intellectual property rights in a particular territory.

You can use objective criteria such as these to justify an outright refusal to provide the service, but this will be more difficult to justify than adapting your conditions –for example, by charging a higher price to cover any additional costs.You would need to be sure that providing the service to the relevant location would put an excessive strain on your business before refusing.

Compliance

The Regulations will be enforced by bodies such as the Office of Fair Trading, Local Authority Trading Standards and the Department of Enterprise,Trade and Investment in Northern Ireland where there is the potential to cause harm to consumers collectively, i.e not B2B transactions generally.

Other Information

There are further details in the guidance notes about how to apply for authorisations and licences online to make it easier for service providers tooperate in EEA countries other than their own (pages 16 - 22). Businesses in theUK can use the businesslink.gov.uk website to link through to other member states.

Further information for businesses seeking to establish themselves in the UK or provide services in the UK can be found on pages 23 – 31.

The Regulations are intended to make it easier to trade in other EEA countries. There is lots of information about what authorities may or may not do to make this possible (pages 31 – 33). If you believe unreasonable barriers or conditions are being created you should consult the Regulations and if they are in breach, you can notify the government to take action (page 31).

There is a section on the relationship between the Regulations and otherlegislation and what to do in the case of a conflict of legislation (pages 34 –36 and 42 - 50 ).