EU situation should be looked at by everyone [LWN.net]

EU situation should be looked at by everyone

Posted Dec 14, 2023 0:06 UTC (Thu) by Cyberax (✭ supporter ✭, #52523)
In reply to: EU situation should be looked at by everyone by farnz
Parent article: Bottomley: Solving the Looming Developer Liability Problem

> if I buy a brand new BMW from Park Lane Limited tomorrow, only Park Lane Limited are liable for manufacturing faults.

What happens if you buy a BMW from Totally Honest Guys Inc. that gets bankrupt and liquidated tomorrow? I'm really curious.

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EU situation should be looked at by everyone

Posted Dec 14, 2023 9:07 UTC (Thu) by Wol (subscriber, #4433) [Link] (3 responses)

You're stuffed! Simple as!

Which is why you should always look seriously askance at any (sales) company that says "we guarantee our own products". If the company goes bust, the guarantee goes with it.

As was mentioned elsewhere, typically BMW will provide a guarantee with the Mini, which the dealer then transfers to you. You now have a CONTRACT with BMW, mediated by the dealer, and if the dealer goes bust BMW will guarantee the contract. Likewise if the dealer was mere agent your contract is with BMW, not the dealer.

Elsewhere you should look for companies that say "we have an insurance contract that covers our guarantees" - you now have a CONTRACT with the INSURANCE COMPANY (or will have, when the receiver transfers it over to you, which they have no choice about). Or the supplier provides a warranty - that's more hassle and grief than going through the retailer, but it least it's a back-stop.

Cheers,
Wol

EU situation should be looked at by everyone

Posted Dec 14, 2023 9:55 UTC (Thu) by Wol (subscriber, #4433) [Link]

Whoops - "supplier warranty" should have read "manufacturer warranty".

Cheers,
Wol

EU situation should be looked at by everyone

Posted Dec 14, 2023 10:05 UTC (Thu) by Wol (subscriber, #4433) [Link] (1 responses)

Oh, and to add, in the case of a manufacturer recall, in practice it works that you can always return your car to ANY dealer. Because BMW's contract with the dealer says that "ANY car you provide warranty/recall/stuff-like-that work on, you bill to BMW". Which is why you can't go to a non-BMW dealer, because there's no contract.

Cheers,
Wol

EU situation should be looked at by everyone

Posted Dec 14, 2023 10:46 UTC (Thu) by farnz (subscriber, #17727) [Link]

Manufacturer recalls are slightly different; those exist because to get a V5C (registration document showing that the car is allowed on the road), you must first show that the car meets requirements.

There's two ways to do this:

The expensive way; get individual vehicle approval from DVSA. If this is the case, then there's no recall mechanism available, since the actual vehicle being registered is inspected and confirmed to be OK. However, it costs more per vehicle, and carries the risk that the vehicle will fail and need remedial work before it can be registered.
The cheap way; get type approval via the Vehicle Certification Agency. Type approval does not involve inspection, necessarily (just paperwork), but the flip-side of type approval is that if you (or the authorities) discover that your vehicle does not meet the paperwork, you have to pay to fix it via the recall mechanism.

This is entirely separate from general liability - it's part of having the rights to use type approval to get a V5C instead of having to use individual vehicle approval.

EU situation should be looked at by everyone

Posted Dec 14, 2023 9:31 UTC (Thu) by geert (subscriber, #98403) [Link]

You contact your local consumer protection group, who will make such a fuss about it that BMW will fix the issue?

UK liabilities during bankruptcy

Posted Dec 14, 2023 10:14 UTC (Thu) by farnz (subscriber, #17727) [Link]

So, first two questions (since "Inc" is not a legally protected suffix in England & Wales); is "Totally Honest Guys" a limited company or not? Second, are the debts contractual (in which case, you're an ordinary creditor) or statutory (e.g. goods of merchantable quality, in which case you're a priority creditor)?

If they're not a limited company, then you're probably stuffed; you've been dealing with a trading name used by a single individual or group of individuals, and you're limited to what you can get out of them personally; if they've got insufficient assets to cover you, you're out of luck. If their liability to you is statutory, however, you get to "go first" when it comes to their remaining assets, before the ordinary creditors; but usual rules about money from nothing apply.

If they're a limited company (i.e. have a company registration at Companies House), it gets more complicated; the liquidation is supposed to put aside a "residual" of the company to cover potential liabilities to priority creditors, which pays out to ordinary creditors as the liabilities fail to materialize. If there's not enough left to put aside a full residual, the directors were trading while insolvent, which is a criminal matter in its own right, and also puts them on the hook personally for any liabilities the residual fails to cover; trading while insolvent (at a minimum) prevents you being a company director for a period of time, and can include a jail sentence. The residual will pay out the liabilities if they occur, or will pay the ordinary creditors if the liability fails to materialize (e.g. if 7 years after bankruptcy, your car has been fine, the money that was put aside to cover the risk that your car needed repair, replacement or partial refund due to merchantability issues will have gone to ordinary creditors in full).

In practice, BMW probably step in to protect their brand in either case, if it's a new car; "Totally Honest Guys" is, if selling new cars, almost certainly trading as "BMW New City" or similar, and BMW want you to be talking about how they stepped in to help you out, not about how you bought a new BMW and had a really bad experience when "BMW New City" went bankrupt.