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Policy on unfair commercial practices |
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(c)â Liability of ‘another person’
The final pair of regulations37 to be considered here depend upon the commission of a prima facie offence by a person whose criminality is due to the act or default of another person. They both have effect irrespective of whether the primary offender is able to claim a valid statutory defence and provide that, when a prima facie offence has taken place and the offence is due to the act or default of another person, that other person will be guilty of the offence,38 subject to the other person’s ability to claim a valid defence. Further, liability will be visited upon that other person irrespective of whether or not they are a trader and irrespective of whether their act or default is an unfair commercial practice or misleading advertising, as appropriate. The fact that a private individual can be held criminally liable if their act or default has subsequently caused the commission of an offence reflects the original hard-line approach of the Trade Descriptions Act 1968, section 23, as evidenced in the decision in Olgeirsson v. Kitching.39 Further, the person may be charged with and convicted of the offence irrespective of whether proceedings are taken against the primary offender.40 It is sufficient to show that a prima facie offence has been committed by the primary offender, there being no requirement for proceedings to have been instituted against him. This allows for the possibility that either the primary offender has a valid defence or, alternatively, that the enforcement authority decides to take no action against him or to use an alternative strategy such as issuing a formal caution. However, if no prima facie offence has occurred because, for example, the main offender is not a trader, then regulation 16 or regulation 9, respectively, cannot be used to take any action against the person whose act or default has caused the main incident to take place.41
Q5 Consider whether it is appropriate to hold a private individual liable for an offence where their act or default has caused the primary offender to commit an offence under these provisions.
5â Civil law enforcement
(a)â Consumer Protection from Unfair Trading Regulations 2008
If good enforcement in this context is about protecting consumers by prohibiting and removing unfair commercial practices, a civil law remedy may be a more effective tool than a criminal prosecution.42 Consequently, in addition to creating criminal offences, the CPUT Regulations 2008 utilise the enforcement
37CPUT Regulations 2008, reg. 16 and BPMM Regulations 2008 reg. 9.
38CPUT Regulations 2008, reg. 16(2) and BPMM Regulations 2008, reg. 9(2), respectively.
39[1986] 1 All ER 746.
40CPUT Regulations 2008, reg. 16(3) and BPMM Regulations 2008, reg. 9(3), respectively.
41Coupe v. Guyett [1973] 2 All ER 1058. See also Griffiths and Griffiths, above n. 29
42Enforcement strategies and methods will be discussed in full detail below.
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5â Civil law enforcement |
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provisions of Part 8 of the Enterprise Act 2002.43 There are three relevant |
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enforcement mechanisms here: enforcement orders and interim enforcement |
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orders under sections 217 and 218, respectively, and an undertaking under sec- |
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tion 219. A failure to comply with any of these three enforcement mechanisms |
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can give rise to further court action for contempt of court, which, if the trader is |
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found guilty, can result in punishment by a fine and, if the defendant is an indi- |
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vidual, a term of imprisonment not exceeding two years. |
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Breaches of the Regulations are specified to be Community infringements |
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within the meaning of the Enterprise Act 2002, being breaches which contra- |
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vene a listed Directive and harm the collective interests of consumers.44 The |
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2002 Act is not concerned with the effect on an individual consumer but rather |
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with the impact on consumers as a collective body. There is no requirement |
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that a large number of consumers have already been affected by the practice |
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in question, simply a realistic expectation that the continuance or repetition of |
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the practice will impact upon consumers generally in the future. When deal- |
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ing with a minimum harmonisation Directive, EEA states can provide add- |
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itional protection over and above the relevant Directive,45 the Secretary of State |
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in the United Kingdom having the power to specify such additional powers.46 |
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However, the Unfair Commercial Practices Directive is a maximum harmon- |
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isation Directive and, hence, no deviation from its terms is permitted and states |
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cannot therefore provide additional protection. |
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The general enforcement bodies for the purposes of the 2002 Act are the |
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Office of Fair Trading (OFT), local weights and measures authorities and the |
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Department of Enterprise, Trade and Investment in Northern Ireland, although |
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the Secretary of State can appoint as a designated enforcer any person or body |
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which has the protection of the collective interests of consumers as one of its |
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purposes.47 |
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(i)â Enforcement orders and interim enforcement orders |
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Before applying for either an enforcement order under section 217 or an |
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interim enforcement order under section 218, the enforcer must consult with |
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both the OFT (assuming that the enforcer is someone other than the OFT) and |
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the person against whom the enforcement order would be made. This is to try |
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and ensure that any infringement will cease and that there will not be any repe- |
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tition of it. However, while consultation must take place, it is subject to a time |
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limit in that, in respect of an application for an enforcement order, the con- |
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sultation period ends after fourteen days beginning with the day following the |
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one on which the trader would have received the request for consultation from |
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the enforcer.48 This is reduced to seven days in respect of an application for an |
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Part 8 of the Enterprise Act 2002 has replaced Part III of the Fair Trading Act 1973 and the Stop |
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Now Orders (EC Directive) Regulations 2001, SI 2001/1422. |
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Enterprise Act 2002, s.212. |
45 Ibid.â 46â Ibid.â 47â Ibid. s.213.â 48â Ibid. s.214(4).
346 Policy on unfair commercial practices
interim time order.49 This prevents traders abusing the consultation requirement by wrongfully extending the time before which an enforcer can seek an order. Indeed, the requirement to consult will not apply at all if the OFT thinks that an application for an order should be made without delay.50
The application must name the person whom the enforcer thinks has engaged, is engaging or is likely to engage in conduct that is an infringement.51 The OFT has the power to decide who will apply for the relevant enforcement order, which might be the OFT itself or such other enforcer as the OFT directs.52 However, if the OFT directs that only itself may apply for an order, that does not prevent either the OFT or any other enforcer from seeking an undertaking under section 219.
An enforcement order will be issued under section 217 if the court finds that the person named in the application has engaged in conduct which constitutes an infringement or is likely to do so. In deciding the matter, the court must take into account whether the person has provided an undertaking and, if so, whether he has breached it. The order, if granted, must specify the Âconduct concerned and direct the person to refrain from continuing with the conduct or repeating it, or conniving at it when done by a body corporate. Further, the enforcement order can require the trader to publish in a manner, form and extent directed by the court, details of the order and a corrective statement. As an alternative to an enforcement order, the court can accept an undertaking instead.
It may be that an order is needed as a matter of urgency, in which case the enforcer may decide to seek an interim enforcement order under section 218 pending the hearing of an application for an enforcement order under section 217. An application must relate to conduct that constitutes a Community infringement, be of such a type that an application for an enforcement order would be likely to be granted and it must be expedient to prohibit or prevent the conduct immediately.53 The interim order must indicate the nature of the conduct concerned and require the trader to comply with the order. The application can be made at any time before an application for an enforcement order has been decided54 and will terminate when that application is determined.55 If it appears appropriate, the court can accept an undertaking from the trader in lieu of issuing an interim enforcement order.56
(ii)â Undertaking
When the enforcer is in the position to apply for an enforcement order, he can instead accept an undertaking from the trader concerned.57 The trader will be someone who the enforcer believes has engaged in conduct which is an infringement, or is engaging in such conduct, or is likely to engage in conduct
49 |
Ibid.â 50â Ibid.â 51â Ibid. s.215(1).â 52â Ibid. s.216(2). |
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Ibid. s.218.â 54â Ibid.â 55â Ibid.â 56â Ibid. |
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Ibid. s.219(2). |
347 5â Civil law enforcement
which would be a Community infringement.58 A trader providing such an undertaking will be deemed to have complied with it if he does not continue or repeat the conduct, does not engage in such conduct in his business or in another business, and does not consent to or connive at the carrying on of such conduct by a body corporate with which he has a special relationship.59 The use of an undertaking would seem to be particularly useful if the trader has only committed an infringement on one occasion or the enforcer is satisfied that the trader did not realise that the conduct concerned was an infringement and that, in either case, an undertaking will ensure future compliance. If an enforcer accepts an undertaking, it must notify the OFT of the identity of the trader and the terms of the undertaking.60 This allows the OFT to co-ordinate enforcement by the various enforcers and to ensure that a trader is not being required to give undertakings to a variety of enforcers when a more formal enforcement order or interim enforcement order might be more appropriate in all the circumstances.
Q6 Consider the likely effectiveness of the use of enforcement orders, interim enforcement orders and undertakings as a means of controlling future breaches of the Consumer Protection from Unfair Trading Regulations 2008.
(b)â Business Protection from Misleading Marketing Regulations 2008
While criminal liability under BPMM Regulations 2008 is restricted to offences against regulation 6, civil enforcement applies to breaches of regulation 3 (misleading advertising), regulation 4 (comparative advertising) and regulation 5 (the promotion of prohibited misleading advertising and comparative advertising).
(i)â Injunctions
Under regulation 15, if the enforcement authority considers that there has been a breach, or is likely to be a breach of regulations 3, 4 or 5, the authority can seek an injunction (and a interim injunction if appropriate) against any person who is concerned with or likely to be concerned with the breach. However, there is a restriction in that, before instituting proceedings, the authority must notify the OFT and then wait for fourteen days to elapse, unless the OFT consents to the proceedings in a shorter period. This allows the OFT to monitor such applications and to co-ordinate the process if more than one authority is seeking an injunction. While this is unlikely to be the case with small local companies, several authorities may be simultaneously considering proceedings against larger companies with a broader reach and a larger purchaser base. The court can require the person to justify the advertising claims that he has made
58 Ibid.â 59â Ibid.â 60â Ibid.