• Industry Codes of Conduct
  • July 11, 2012
  • Law Firm: Norton Rose Canada LLP - Montreal Office
  • It is time for industry associations to draft their industry codes of conduct under the Consumer Protection Act. The purpose of a code is to provide practical methods of receiving and handling complaints and an ombud to resolve disputes within an industry.

    The National Consumer Commission published draft guidelines on 23 May 2012 which will, with a few changes, be published as the final guidelines soon. The guidelines give clear advice how a plain language code should be constructed.

    The law gives no guidance as to what is an industry. By ordinary definition, an industry is any branch of manufacture or trade. Care has to be taken in deciding the scope of a code because once it is approved by the Minister it is binding on everyone within the particular industry. The bigger the industry, the more difficult it is to consult all members. Codes will work best within industries which already have their own industry bodies. With some amendments, existing industry codes and ombud schemes can be adapted as industry codes. The motor industry has already prepared a draft code applicable to everyone within the industry as a very broad category. Those developing a code from scratch may look to industries that already have their own codes. For instance, the insurance industry has a workable code and ombud for both the short-term industry and the long-term industry. Available codes can be adapted to fit the guidelines.

    The advantage of a good code is that disputes can be resolved by experts appointed to handle complaints within the industry. Instead of everything going to the National Consumer Commission, the industry can raise its reputation with consumers by giving them access to consistent, fair and transparent ways in which to resolve their complaints without delay.

    Data needs to be collected regarding the sort of complaints and disputes that arise to see that the industry maintains good practices and a good reputation. Consistent complaints about a particular product may, for instance, lead to a product recall. Methods of sharing information through the industry must be devised. Subject to competition laws, ideas and problems can be communicated amongst industry-players and consumer bodies to the benefit of everybody.

    There are also plenty of good examples of ombud schemes, for instance the pension fund adjudicator, the intermediary services ombud, the credit ombud, the insurance ombuds and many others. If the industry is a large one, provision may have to be made for a few ombuds with different specialisations or for the ombud to make decisions in consultation with appointed experts.

    Complaints procedures must be fair and disputes must be resolved by independent persons with expertise and integrity. It is so much better for a supplier to have disputes resolved in this way rather than by confrontation with a regulator with a potential for fines, penalties and reputational damage.