What Brexit could mean for block exemption

Independents remain concerned about maintaining a competitive market with main dealers

What Brexit could mean for block exemption
Are you concerned about the future of Block Exemption? Share your comments with GW. Image: Bigstock.

The Independent Garage Association (IGA) has revealed the legal implications of the UK’s Brexit vote for workshops in a new report that warns of “turbulent times” but suggests that “it will work out well for UK businesses” in the future.

In the report compiled for the IGA by Motor Industry Legal Services (MILS), solicitors explain that Block Exemptions are automatically translated into UK law but say that “this mechanism will have to be considered and addressed post Brexit”.

Henry Knill and Paul Carroll of MILS wrote: “The [European] Commission will lose any jurisdiction and powers of investigation within the UK.

“This will free up the UK authorities to pursue a different enforcement approach, with the potential for parallel investigations by UK and EU competition authorities where any anti-competitive actions include UK and EU Commercial entities.

“Whilst the UK continues to access the common market for goods and services it is likely that our competition law, any exemptions and enforcement will continue to mirror those within the EU.”

Block Exemption

To keep a competitive car maintenance market, European regulations renewed in 2010 ensured consumers do not have to get their cars serviced by a main dealer during a vehicle’s warranty period.

It meant that independent garages in the UK have been able to service a customer’s car without affecting its warranty, as long as manufacturers’ recommended service schedules are followed and the parts used are OE parts or of matching quality.

Successful lobbying to protect the independent aftermarket was co-ordinated across Europe, under the ‘Right2Repair’ banner in the UK.

However, the future of Block Exemption regulations in the UK remains uncertain post Brexit, with a number of independent garages contacting GW to raise their concerns.

Jane Russell of Russell Automotive Centre in London said: “Block Exemption should be on everyone’s minds.

“It needs to be made clear if this EU regulation will stay post Brexit.”

‘Shot ourselves in the foot’

Commenting on a recent GW survey which found that 80 per cent of readers backed the leave campaign, Jane added: “[I’m] shocked so many people in the industry wanted out.

“Really shot ourselves in the foot in my opinion.”

Similar Brexit support was seen in an IGA survey.

In an email to IGA members, director Stuart James said: “Prior to the campaign we surveyed IGA members asking for a straight ‘in or out’ vote and 76 per cent wanted to leave the EU, which in many ways mirrors the view of other small businesses in other sectors.

“We know there are challenges ahead but believe in the longer term it will work out well for UK businesses and may provide new opportunities.”

Concluding the report, Henry Knill and Paul Carroll agree that the British government will now have more freedom to introduce legislation, with the potential to bring even more opportunities for the aftermarket.

‘No need to panic’

GW reader, Steve Long also believes that concerns for Block Exemption are unnecessary because the UK is now free to improve regulations.

He said: “Out of the EU we can keep or improve block exemption rules because it will be up to us how we handle it.”

The IGA’s Brexit document says the trade has “no need to panic” and that “radical changes to most areas of UK law remain unlikely.”

Please leave your concerns about the future of Block Exemption in the comments below.

18 Comments

  1. Fair comment, we still had 4-2-2 mot problem with the EU and splitting mot repair work up.

    Reply
  2. Fair comment, we still had 4-2-2 mot problem with the EU and splitting mot repair work up.

    Reply
  3. I think we will struggle with the expertise on the legal front because the last 40 years part of the monies paid into Brussels funded this.

    Reply
  4. I think we will struggle with the expertise on the legal front because the last 40 years part of the monies paid into Brussels funded this.

    Reply
  5. We already see some manufacturers putting a 7 year warranty on their vehicles. Nothing is now certain and everything is uncertain in our independent market. To think that the manufacturers wont now include “have to be serviced by dealer for 7 year warranty period” cannot be ruled out. I think we have to worry. We have a dealer locally already planning to expand its operation. I think more will follow and this could be the demise of the independent garage and choice for the consumer. We are considering up grading our dealer level diagnostics and servicing tools for BMW, Land Rover and VAG – but if the manufacturers will not allow this information in the aftermarket post Brexit then it will be a total waste of money. We really do need to worry and although I keep hearing there may be “new opportunities”, I dont hear anyone actually saying what those opportunities may be? I voted to remain, because I couldn’t see any benefit to our buisness to exit. The proof will be in the coming years no doubt!

    Reply
  6. We already see some manufacturers putting a 7 year warranty on their vehicles. Nothing is now certain and everything is uncertain in our independent market. To think that the manufacturers wont now include “have to be serviced by dealer for 7 year warranty period” cannot be ruled out. I think we have to worry. We have a dealer locally already planning to expand its operation. I think more will follow and this could be the demise of the independent garage and choice for the consumer. We are considering up grading our dealer level diagnostics and servicing tools for BMW, Land Rover and VAG – but if the manufacturers will not allow this information in the aftermarket post Brexit then it will be a total waste of money. We really do need to worry and although I keep hearing there may be “new opportunities”, I dont hear anyone actually saying what those opportunities may be? I voted to remain, because I couldn’t see any benefit to our buisness to exit. The proof will be in the coming years no doubt!

    Reply
  7. I asked this question and not one person could or would answer it. Seems a bit late to be asking it now the votes are in.

    Reply
    • Thanks for your comment. I think people were just as uncertain before the referendum as they are now, it’s hard for anyone to say for sure what might happen but I think it’s hugely important for the trade to highlight this issue to ensure that an equivalent exemption exists when we officially become a sovereign state.

      Reply
  8. I asked this question and not one person could or would answer it. Seems a bit late to be asking it now the votes are in.

    Reply
    • Thanks for your comment. I think people were just as uncertain before the referendum as they are now, it’s hard for anyone to say for sure what might happen but I think it’s hugely important for the trade to highlight this issue to ensure that an equivalent exemption exists when we officially become a sovereign state.

      Reply
  9. I have a theoretical answer which may also be taken as a question. Pre block exemption the manufacturers provided a 12 months warranty on their product as required by law and the 2nd and 3rd year warranties were outsourced to brokers who added the caveat that this part of the warranty would be invalidated if the vehicle was serviced outside the franchised dealerships in the first year.
    Post block exemption all the extended warranties are provided by the manufacturers themselves so the caveat of invalidation cannot apply in the eyes of UK consumer law as far as I am aware. I cannot see how the European manufacturers can now justify going back to the old 12 month warranty especially in light of Japanese and Asian competition with much longer extended warranties and no invalidation caveats so therein poses the question for the legal eagles regarding our rights under UK consumer law. Yes the manufacturers may continue to chuck a spanner in the works by restricting or refusing access to security related repair information but hey, we have lived with that for the past 12 years so I am sure we can continue to do so until this is all sorted out.

    Reply
  10. I have a theoretical answer which may also be taken as a question. Pre block exemption the manufacturers provided a 12 months warranty on their product as required by law and the 2nd and 3rd year warranties were outsourced to brokers who added the caveat that this part of the warranty would be invalidated if the vehicle was serviced outside the franchised dealerships in the first year.
    Post block exemption all the extended warranties are provided by the manufacturers themselves so the caveat of invalidation cannot apply in the eyes of UK consumer law as far as I am aware. I cannot see how the European manufacturers can now justify going back to the old 12 month warranty especially in light of Japanese and Asian competition with much longer extended warranties and no invalidation caveats so therein poses the question for the legal eagles regarding our rights under UK consumer law. Yes the manufacturers may continue to chuck a spanner in the works by restricting or refusing access to security related repair information but hey, we have lived with that for the past 12 years so I am sure we can continue to do so until this is all sorted out.

    Reply
  11. All this scare mongering is getting on my wick you state 70-80% of small businesses voted out (Jane was shocked to see so many people in the industry voting out) well Jane we did! You are one of the minority, we now need a government to do the British peoples asking we can now make our own rules we are independent! We import more cars than we export. What if the government was to implement more tax on imports if they do not comply with our block exemption rules? Lets put the GREAT back in Britain.

    Reply
  12. All this scare mongering is getting on my wick you state 70-80% of small businesses voted out (Jane was shocked to see so many people in the industry voting out) well Jane we did! You are one of the minority, we now need a government to do the British peoples asking we can now make our own rules we are independent! We import more cars than we export. What if the government was to implement more tax on imports if they do not comply with our block exemption rules? Lets put the GREAT back in Britain.

    Reply
  13. Does anyone actually believe our govt. will not bow to big company pressure and get rid of block exemption.
    We will be back to the bad old days of the car manufacturers and dealers dictating terms, withholding data etc etc. And no it is not scare mongering. All govt.s listen to big business far more than us little businesses-fact!
    We already control all mot testing functions, look at the mess that is in. All the 4.2.2 talk came from our own civil servants feeding our elected ministers rubbish data. We spent a fortune through people like the IGA to lobby against it twice.
    I see a lot of risks, not benefits to my business from brexit, Julie is simply pointing out a few that we are all concerned about. I think we do need to think and react to potential risk not dream about opportunities that no one has yet quantified.

    Reply
  14. Does anyone actually believe our govt. will not bow to big company pressure and get rid of block exemption.
    We will be back to the bad old days of the car manufacturers and dealers dictating terms, withholding data etc etc. And no it is not scare mongering. All govt.s listen to big business far more than us little businesses-fact!
    We already control all mot testing functions, look at the mess that is in. All the 4.2.2 talk came from our own civil servants feeding our elected ministers rubbish data. We spent a fortune through people like the IGA to lobby against it twice.
    I see a lot of risks, not benefits to my business from brexit, Julie is simply pointing out a few that we are all concerned about. I think we do need to think and react to potential risk not dream about opportunities that no one has yet quantified.

    Reply
  15. I’d just like to know why all the optimists out there that voted “leave” think European motor manufacturers will be compliant in our renegotiated “better deal for UK garages” terms, when we’ve just deeply insulted them by rejecting them. Of the alleged 76% of our industry who voted to leave, how many really understood the possible affects of losing EU block exemption?

    Reply
  16. I’d just like to know why all the optimists out there that voted “leave” think European motor manufacturers will be compliant in our renegotiated “better deal for UK garages” terms, when we’ve just deeply insulted them by rejecting them. Of the alleged 76% of our industry who voted to leave, how many really understood the possible affects of losing EU block exemption?

    Reply

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