Bill Introduced in Ohio Legislature Will Impact Consumer Protection
While dressed in neutral language, the bill will 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.

CLEVELAND, OH, September 22, 2011 /24-7PressRelease/ -- 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 bill will 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. Ultimately, 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.

The rationale behind the changes is that the proposed law will promote settlements and deter frivolous suits; however the stripping of attorney's fees from recovery will make 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, fewer 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.

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, the unintended consequence of H.B. No. 275 is that it may only provide protection for dishonest businesses, allowing them to prey on consumers, and providing financial cover for their misdeeds.

Press Release Contact Information:

Renee Latkovic
Spangenberg, Shibley & Liber LLP
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