Legal - Weapon of instant confiscation

Weapon  of instant confiscation

Legal perspectives In this feature enforcement order new powers three criteria Weapon of instant confiscation Denis Barry explains how amendments to the Enterprise Act will turn what was a fairly crude tool into a much more sophisticated and effective weapon for beleaguered trading standards officers M any trading standards ofcers will have experience of bringing major prosecutions against defendants or companies that have shamelessly ripped off consumers only to nd that, ultimately, the money is not returned. Of course, conscation proceedings are a useful tool, but under the incentivisation scheme not all of the cash goes back to the prosecutor. Furthermore, impoverished local authorities may choose to fund street lighting or refuse collection, instead of ploughing the money back into trading standards. However, this tool is about to be turned into a much more sophisticated weapon for trading standards by amendments to the Enterprise Act (the Act). The new provisions, which are due to come into force on 1 October, are contained within the Consumer Rights Act 2015 although they are not particularly easy to source as they are hidden away in Schedule 7. A government consultation on this topic with the sexy title Extending the range of remedies available to public enforcers of consumer law made it plain that, before kicking off Enterprise Act or other proceedings, enforcers were obliged rst to consult and try to secure remedial actions. Surely, in these austere days, its blindingly obvious that no trading standards department would do anything other than think long and hard before charging into proceedings. The problem with the old Enterprise Act is that it did not tend to make positive changes in the behaviour of traders. Breaches could be stopped, but as any priest or parent knows that is not the same thing as changing someones behaviour. The new provisions are designed to: G Increase business compliance with the law G Improve redress for consumers affected by breaches G Provide for more condent consumers by empowering them to exercise greater choice That is not to say one should not prosecute in the right case and, out there somewhere, there are probably barristers chambers able to help with such an exercise. (See panel, The changes, below.) The new powers The aim of the legislation is to be as flexible as possible, so the types of measures that can be sought are not defined. However, they must be just, reasonable and proportionate Set out in section 219A, the new powers fall into three categories: G Redress G Compliance G Choice The aim of the legislation is to be as exible as possible, so the types of measures that can be sought under the new categories are not dened. However, any measure must be just, reasonable and proportionate. The enforcer should consider whether the costs of enforcement are justied, and the extent to which the consumer will benet. Redress is dened in section 219A(2), and includes compensation and an option to terminate the contract. An order for redress can only be made where there has been a loss. This is, potentially, a fabulous new addition to the armoury. If a defendant has been ripping off consumers by persuading them to buy products that dont do what they say on the tin if they do anything much at all and you bring the action, you may require the defendant to provide redress. Similar provisions, found in another part of the Act, are being brought in for those who breach competition law, so there is some element of joined-up thinking. The new provisions can force businesses to change the way they behave, rather than just punish them for another piece of poor behaviour Compliance is designed to prevent the occurrence or repetition of the conduct, and the terms of the order are only limited by the requirement of proportionality. The types of measures envisaged could be: making a trader join the Primary Authority Scheme; increasing and improving employee training to prevent further breaches; or appointing a dedicated member of staff to be responsible for ensuring compliance. There is no particular list, though its simply a matter of using your imagination. Obviously, its disproportionate to invite a shop that has sold reworks to someone underage to appoint a rm of consultants to draft a due diligence policy. There is no obligation simply to use one measure, so if a consumer has been ripped off redress can be provided by the trader making payment of the difference in price, while increased training can form part of their compliance. An obligation to provide records could also be a requirement. Choice dealt with in section 219B(4) suggests measures that enable consumers to choose more effectively between those supplying, or seeking to supply, goods or services. The draft guidance that has been published gives an example of the way in which this provision could be used. If several complaints are received about a particular rm say an online car business and a criminal prosecution is pending, but not due to take place for some time, it is open to the enforcer to require the company to place a notice on the website indicating that their conduct has led to an enforcement notice. There is no need to wait for the end of criminal proceedings to take action. So why is this exciting? Because it has the potential to provide what John Lennon might have described as Instant Conscation. It can force businesses to change the way they behave, rather than just punish them for yet another piece of poor behaviour, and can help provide consumers with more information about the rogues they may be about to get into bed with. All we need now is some government money for local authorities but that topic requires very much more space than is available for this brief. The contents of this column do not necessarily reect the views of CTSI, nor do they always take account of the law in Scotland THE CHANGES What are the changes, how do they work, and how does one go about enforcing them? To obtain an Enforcement Order under the Enterprise Act 2002 (EA 2002), three criteria have to be satisfied: Conduct Be aware of the critical difference in EU to remedy the conduct over which There has to be activity that is a breach of community infringements as opposed a complaint has been made, or the a domestic or community infringement. to domestic infringements whereby an need for consultation has been waived These are listed at length in Statutory application may be made for an order on because the harm was so bad that action Instruments see SI 2008/1277 and potential future conduct, deemed likely to was called for. include the whole of the Copyright constitute a community infringement. All of this is contained in sections 210 to 223 of the EA 2002, available on the Designs and Patents Act, the Consumer Credit Act, the most frequently used Harm internet and no doubt written on the provisions of the Trade Mark Act and the There is, has been or is likely to be wall of many chief executives offices. Unfair Contract Terms Act. harm to the collective interests of You would need to check that you consumers. Presumably, that hurdle will are also an enforcer, but I am prepared lengthy and handy list containing all be small and easy to cross, or else your to assume that the readers of TS Today of the regulations on doorstep selling, ratepayers may begin to barricade the come into that category. However, if package travel and very importantly council offices. members of the five Mafia families of New For EU legislation, there is a similarly York are reading this article in error, the the Consumer Protection from Unfair Trading Regulations 2008, aka the CPUTs Consultation term enforcer has a different meaning or the CPRs, depending on your choice of A period of consultation between the within the Enterprise Act at least for the acronym. See SI 2003/1374. infringer and the enforcer has failed time being. Credits Published You might also like Denis Barry is a barrister at Thursday 28 May, 2015 Selling their souls May 2015 5 Paper Buildings. Images: CSA Images / Getty Images To share this page, click on in the toolbar