easyCar wins court case brought by OFT

easyCar has just won an important legal case in the European Court of Justice (ECJ). The case, which was brought by the UK Office of Fair Trading (OFT), was about cancellation rights (known as 'cooling off' periods) in the car hire industry and the ECJ ruled in favour of easyCar in Brussels on 10 March.

The Consumer Protection (Distance Selling) Regulations 2000 state that where contracts are concluded at a distance (for example by telephone or over the Internet, not face to face) customers are allowed a seven day cooling off period. There is an exemption for transport services.

The OFT maintained before the High Court and the ECJ that cancellation terms applied by easyCar to Internet bookings were contrary to the "cooling off" requirement in the Regulations. The ECJ has now ruled in easyCar's favour, concluding that car hire services fall within the exemption for transport services, and are thus not subject to the cooling-off period.

easyCar will ask the OFT, as the losing party, to pay its costs.

easyCar maintained that it was in the business of the "provision of ...transport" and should be exempt from this regulation which was designed anyway to protect consumers from pushy telephone salespeople, not from a company like easyCar which does in excess of 95% of its sales through its website.

easyCar also maintained that giving a minority of customers the right to cancel and hand back inventory at the last minute would directly increase prices to the majority of customers. easyCar keeps prices low by offering a no cancellation policy and by offering consumers best prices. This stimulates demand and increases utilisation of the fleet. A higher percentage of cars on hire means increased efficiency and therefore an ability to offer customers lower prices. If customers were allowed to hand back inventory at the last minute, easyCar would not be able to maintain high utilisation rates and prices would increase.

"This is a victory for both easyCar and the consumer," said Stelios the serial entrepreneur and easyGroup chairman. "easyCar can offer consumers great prices but it must ask them to make a firm commitment and, whenever possible, to book online."