Supreme Court of Pennsylvania to Decide Strict Liability under Consumer Protection Law by Frederick S. Wolfson and Andrew J. Race, Esquires

Pennsylvania has enacted the Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), which is designed to protect consumers from fraudulent or deceptive business practices. Recently, The Supreme Court of Pennsylvania has decided to hear argument on the “catch-all provision” and the standard of proof required to make a claim.

The catch-all provision prohibits any “fraudulent or deceptive conduct which creates a likelihood of confusion or of misunderstanding” (73 P.S. § 201-2(4)(xxi)) in a business transaction. The UTPCPL is a valuable tool for consumers as it can allow the recovery of attorney’s fees and costs as well as the possibility for an award of damages up to three (3) times the damage actually sustained.

In the case Gregg v. Ameriprise Financial, Inc., et al, the Superior Court held that the catch-all provision of the UTPCPL no longer requires a consumer to prove common-law fraud or negligence but, instead, imposes strict liability upon businesses. This puts the burden on businesses to ensure their practices are not deceptive in such a way to cause confusion. The intent element no longer matters. The Gregg case now aligns the Superior Court with the Commonwealth’s Court rationale of how to interpret the catch-all provision.

All eyes will now be on the Supreme Court of Pennsylvania who will decide whether or not consumers filing lawsuits under the catch-all provision must prove common law fraud or negligence or whether a business engaging in conduct which would confuse an unsophisticated consumer creates liability on its own.

Both businesses and consumers are watching this case carefully as it is likely to transform how business-consumer disputes are handled moving forward.

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