Claiming it would increase customer costs, add legal risks for operating almost any business and even create a “nanny state” in the Cayman Islands, local business leaders railed against dozens of provisions contained in the government’s draft Consumer Protection Bill during a Thursday afternoon meeting at the Chamber of Commerce headquarters.

Although the idea has been under discussion for the last decade, the draft legislation released last October is Cayman’s first attempt to put pen to paper on a proposal that sets out a consumer’s “bill of rights” and that seeks methods of redress for unfair or unscrupulous business practices.

A public comment period on the draft law is in place through March 1.

Many of Cayman’s business leaders saw the legislation for the first time Thursday and most of them did not have good things to say about it.

“This [proposal] is not a friend … in terms of lowering costs of doing business in Cayman,” said Foster’s Food Fair IGA Managing Director Woody Foster.

“It’s clear to me that whoever drafted this has never run a business,” said Health City Cayman Islands developer Gene Thompson. “It’s very anti-Caymanian, and very anti-business. There’s the underlying assumption in this bill that every one of us is dishonest. We’re trying to fix a problem that does not exist.”

“This is definitely adding costs … and it’s definitely adding huge risks,” said Cayman Turtle Centre Managing Director Tim Adam. “It’s going to mean either unavailability of goods and services … or the suppliers are going to say that they are going to have to build into their pricing the protections that they need.”

Most business owners on Thursday did not simply oppose the idea of consumer protection. Mr. Foster, for instance, said he supported the concept but noted there was nothing in the current draft of the bill that offered equal protection for businesses against dishonest consumers.

“The consumer has to have something to go back to, but I don’t think it’s this bill,” he said.

What it says

The draft bill seeks to establish “a legal framework for the achievement and maintenance of a consumer market that is fair, efficient and responsible.” The law, if passed, would apply to “all persons engaged in a trade or business.”

The legislation seeks to create a Cabinet-appointed Consumer Affairs Commission, consisting of five people that would be given the powers of a court to request information in consumer-business disputes and to investigate consumer complaints. The commission is given the power to order certain penalties for those who violate the law and is tasked with providing general information on consumer rights.

Orders given against wayward companies or service providers by the commission can include demands to replace defective or unsafe goods, to discontinue unfair trade practices, to pay compensation to consumers if a breach of law occurs and to correct erroneous advertisements.

Goods and services suppliers that do not comply with commission orders can receive up to a year in prison or a $5,000 fine. A person who is aggrieved by a commission order may appeal to the court within 30 days of the order.

The draft bill also sets out certain “rights” given to the consumer, including the right to refuse unsolicited goods, the right of the consumer to authorize services and rights to avoid “unreasonable” cancellation charges. The draft bill seeks to allow consumers to halt “continuing service agreements” three weeks after giving notice.

The legislation would set out “guarantees” in relation to the supply and quality of goods or services provided. The supplier or manufacturer which breaches those guarantees is said to be “liable to such penalties as may be described” in the draft language of the bill.

Legal aid

Attorneys from HSM Chambers were on hand Thursday to review the draft proposal section-by-section with business leaders. They urged anyone with concerns about the bill to send in comments before the March 1 comment deadline.

“The last of corrective measures the commission can issue is quite long and quite serious,” said Peter De Vere, head of HSM’s corporate/commercial department. “It’s important that laws have teeth. I take [the] point that this might seem one-sided, but now that you know how this interaction between consumer and supplier will take place … I think this will actually help you.”

Chamber President Paul Byles said the organization would ask for a further extension to the comment period of the draft bill, which has not been scheduled to be heard before the Legislative Assembly thus far. It was anticipated that additional revisions would be made to the legislation before that presentation.

Mr. Byles questioned Thursday whether the draft bill in this case had actually been “informed” by business owners prior to being released.

“At our meeting [Thursday] it became clear that there are quite a few legitimate concerns [about the draft bill], some of these stemming from impractical applications of various aspects of the bill as currently drafted,” a statement released by the Chamber Council Friday noted.

“I want to know where we’ve had this major problem in business … that someone would try and bring in a law like this?” Mr. Thompson asked.

Consumer rights

The Cayman Islands Law Reform Commission has been pushing to create consumer protection rules for nearly a decade, noting in a 2010 report that “consumer protection is essential against those who profit from mass consumption, engage in cost-cutting measures at all levels of production and, at the same time … adopt predatory practices which ultimately abuse customer interests …. ”

A further report on the subject was released by the law commission in 2015.

Cayman currently operates a “caveat emptor” consumer system, where the buyer is solely responsible for reviewing the quality and suitability of the goods or services being sold prior to purchase.

There is some protection against price gouging during emergencies – hurricanes or other natural disasters. The Cayman Chamber of Commerce also functions as something of a “better business bureau” for its membership, but if a business is not a Chamber member, there is little the agency can do to protect buyers.