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By Felicity Ussher, 31 March 2000 00:30

NEWS Hopes for a breakthrough on online trade laws were dashed yesterday by the European Parliament. The European Union is in the process of rewriting the Brussels Convention on cross-country trading, to take into account ecommerce. MEPs were yesterday due to give the green light to a report by Liberal Democrat MEP, Diana Wallis, which proposes trade disputes over refunds and misleading advertising should be settled out-of-court. But after hours of wrangling, the debate collapsed when Wallis voted out her own report. She told Silicon.com: "It's a strange thing to do, but unfortunately a large number of amendments had been tabled to it, and also the voting got rather confused. So by the time it came to the final vote as to whether we accepted the report or not, I think a number of us felt that what we would have been voting for - if I can put it in common parlance - would have been a bit of a dog's breakfast." The 1968 convention establishes that businesses selling into foreign markets should be subject to the laws of the customer's home country. Wallis had maintained this principle, but a key amendment introduced to her report yesterday by Tory MEP Lord Inglewood, would have given ultimate jurisdiction to the merchant's home country. Lord Inglewood told Silicon.com: "Electronic commerce should run in line with a single market or it will put off small businesses. They don't want to have to comply with the retail laws in all their national markets." Wallis believes that Inglewood's proposals - supported by around 95 per cent of European businesses - would make it difficult for consumers to seek redress abroad. But Mike Pullen, EU lawyer at Dibb Lupton Alsop, said Inglewood's amendment was the compromise solution. He told Silicon.com: "Inglewood wants Web traders to put disclaimers on their sites, notifying customers that they are now shopping under a new jurisdiction. This disclaimer would describe the retail laws unambiguously so consumers would not even need to go to court." Diana Wallis has two months to rewrite her report before presenting it to MEPs again.