Republican Reps. Lynn Slaby, from the Akron area, and Ron Young, from Lake County, with support from GOP Attorney General Mike DeWine, have submitted legislation that would allow businesses sued under the Consumer Sales Practices Act a “right to cure.”
While dressed in neutral language, the purpose of the bill is to limit consumer’s recovery under the Consumers Sales Practices Act. It allows a business a “right to cure” before the consumer can proceed to court. The catch is, if you fail to recover more than the business offered before you sue, you lose the treble (triple) damage provision and attorney fees otherwise provided in the act.
While on its face, it appears to be reasonable, the stripping of attorney’s fees from this recovery makes it much more difficult to bring a lawsuit. Taking a case to court is always a risk, no matter how legitimate the claim. With that risk and the chance of no attorney’s fees, few consumers will risk the cost of litigation.
WHY DOES THE ACT HAVE THE DAMAGE PROVISIONS IT DOES?
The current version of the Consumer Sales Practices Act permits a consumer to recover three times the amount of the consumer’s actual economic damages, and for over 30 years, attorney fees.
This was done in recognition of the fact that many consumer transactions are low-dollar amounts and because the cost of litigation could be more than the value of the damages.
Courts in Ohio have noted this, stating,
“Since recoveries under this Act are often small and generally insufficient to cover attorney fees, without an award of attorney fees many consumers would be persuaded not to sue. Awarding attorney fees under the Act allows private redress of individual wrongs, but also may benefit the community generally because a judgment for the consumer may discourage violations of the Act by others. Prohibiting private attorneys from recovering for the time they expend on a consumer protection case undermines both the purpose and deterrent effect of the Act.”
A PREVENTATIVE ACT
The Act is not designed merely to provide compensation to an injured consumer. The legislative purpose of the section allowing an award of attorney fees states it was designed “to prevent unfair, deceptive, and unconscionable acts and practices, to provide strong and effective remedies, both public and private, to assure that consumers will recover any damages caused by such acts and practices, and to eliminate any monetary incentives for suppliers to engage in such acts and practices.”
The rationale is that if they only have to pay nominal amounts for violations of the Act, some business will see “getting caught” as merely a minor cost of doing business, and will freely engage in unfair or deceptive acts, knowing it will won’t cost them a great deal.
A WOLF IN SHEEP’S CLOTHING
Legislators often present bills like H.B. No. 275 as if every business is honest, and no business ever engages in deceptive or unfair practices. While most businesses are legitimate, as the Banking Crisis of 2008 demonstrates, some engage in deceptive practices. Additional protection would also help the honest businesses, too, by allowing consumers to recoup their losses from dishonest businesses – losses that can then be spent with legitimate companies. However, bills like H.B. No. 275 only provide protection for dishonest businesses, allowing them to prey on consumers, and providing financial cover for their misdeeds.
