Motor head

With a £45bn turnover per year, no one could argue the might behind the motor industry, and SMMT is at the forefront of the action

When Melanie Wiseman, the senior legal adviser at the Society of Motor Manufact-urers & Traders (SMMT), joined the trade association in June 1996, she admits that she was not very interested in cars. But now she thinks the industry is fascinating. “A car is the most expensive product a person will buy after their house. Consumer law does not differentiate between products. You’ll pay thousands of pounds for a car and yet the same legislation covers a toaster. That creates a very interesting situation,” she says.

Before she joined SMMT, Wiseman spent 18 months specialising in film finance insurance litigation at Clyde & Co and then worked part time at the Mary Ward Legal Centre. Wiseman wanted to move in-house because she liked the idea of working in an environment where she knows her client and which would allow her to be more involved in commercial issues.

SMMT was the brainchild of Frederick Simms, who realised at the turn of the 20th century that the motor industry lacked a central body to provide leadership and protection.

When SMMT was first launched in July 1902 its principal aim was to supervise the running of motor shows. The first SMMT Motor Show was held at Crystal Palace in January 1903 and then later moved to Olympia, where it remained for 32 years. In 1937 the show moved again – this time to the redeveloped Earls Court site.

After a break during World War II, the motor show was re-introduced in October 1948. The Motor Show was then moved to the National Exhibition Centre (NEC), Birmingham, in 1978. The biennial Motor Show, now referred to as the British International Motor Show, is still hosted at the NEC.

The British International Motor Show is SMMT’s main commercial activity and is the largest consumer exhibition in the country. The last show was held in October 2002 and generated a turnover of around £11m.

SMMT has a membership base of around 800. It represents a sector that has a UK turnover of £45bn per year and that employs 750,000 workers. The organisation’s non-commercial activities can be broadly split into three categories – regulatory, advisory and lobbying.

SMMT is responsible for overseeing the Code of Practice for the motor industry and for mechanical breakdown insurance schemes. The consumer affairs department, which works alongside the legal department, provides SMMT’s members with an impartial conciliation service to help their customers if a dispute is not resolved satisfactorily. The consumer affairs department is also responsible for overseeing the Code of Practice on Motor Vehicle Safety Defects, which deals with product recall.

The legal department provides general advice to its members, and specific advice to SMMT in order to facilitate and safeguard its work. Addtionally, the department monitors changes to UK and EU law that affect the motor industry. It is involved in lobbying the Government and the European Commission on issues affecting the motor industry, including competition law, environmental matters and consumer affairs.

Last year, SMMT lobbied the Department of Trade and Industry and the European Commission on amendments to the controversial block exemption regulation. The old block exemption, which was renewed last October, provided a dispensation for the car industry from general competition rules applicable within the EU, so that car manufacturers could distribute their vehicles within a selective and exclusive distribution system.

“It [the block exemption] is a major issue to allow the motor industry to continue flourishing and to allow it to produce cars and distribute them in a way that is most appropriate and beneficial to consumers,” says Wiseman.

She says that SMMT lobbied very hard to seek the most workable and reasonable solution and successfully negotiated acceptable changes to the block exemption regulation. “There were various reasons why we supported the existing regime and didn’t want an alternative one. And while those reasons have either been correctly or incorrectly stated in the press, we can say that we’ve actually been successful in our lobbying because we were happy with the end result,” she says.

On the consumer issues side, Wiseman has been in discussions with the Government on the new Sale and Supply of Goods to Consumers Regulations 2002, which were implemented in the UK as a result of the Sale and Consumer Goods and Associated Guarantees Directive that was adopted by the EU in May 1999. The regulation, which comes into force on 31 March, will give consumers a legal right to request a repair or replacement and, if appropriate, consumers will be entitled to a refund or price reduction. Wiseman says that the new legislation reflects what is in fact general commercial practice and will sit alongside existing consumer law.

“Initially the regulations put a heavy burden on retailers and not much responsibility on consumers. SMMT helped to achieve a sense of balance between the obligations of the seller and the responsibilities of the buyer,” she says.

When the directive was first published by the EU in 1996, it was looked into by a House of Lords select committee. Through her seat on the Confederation of British Industry’s consumer affairs working group, Wiseman gave evidence to the select committee on behalf of the motor industry.

SMMT also works in conjunction with the Government on environmental issues. SMMT has helped vehicle manufacturers in reaching an agreement with the Government whereby vehicle manufacturers are entitled to an 80 per cent reduction on the Government’s climate change levy. The relief is available in respect of particular manufacturing processes associated with vehicle production in return for meeting certain energy reduction targets.

SMMT supported the Government’s new company car tax rules, which seek to reduce carbon dioxide emissions. It also has an entire department dedicated to collecting and analysing statistics about the motor industry. The department can obtain data from the Driver and Vehicle Licensing Agency concerning the ownership of vehicles in the UK and the number of new vehicles that are registered each year.

Even though SMMT’s legal department comprises only three lawyers, it only outsources work that is highly specialised. SMMT’s legal spend is around £100,000 per year. Wiseman says that there is no formal panel, but she does limit the firms that she uses.

She says that Wragge & Co has a relationship with SMMT because it is based in Birmingham, the centre of the motor industry, and because its fees are competitive. Wiseman also uses Dechert because the firm’s relationship partner Peter Crockford used to work at SMMT. CMS Cameron McKenna is retained to provide general advice, while Nabarro Nathanson handles pensions work. Although there has never been a formal review of SMMT’s external lawyers, Wiseman says: “We are constantly assessing whether we are getting value for money.”
Melanie Wiseman
Senior legal adviser
The Society of Motor Manufacturers & Traders

Organisation The Society of Motor Manufacturers & Traders
Sector Motoring/Trade association
Turnover £22m (£11m generated from British International Motor Show)
Membership 800
Employees 92
Legal capability Three
Annual legal spend £100,000
Senior legal adviser Melanie Wiseman
Reporting to Seffton Samuels, company secretary
Main law firms CMS Cameron McKenna, Dechert, Nabarro Nathanson, Wragge & Co