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The Enterprise Act 2002: Your Powers

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The Enterprise Act 2002: Your Powers LEGAL PERSPECTIVES IN DEPTH The Enterprise Act 2002: Your powers Barrister Polly Dyer looks at how the latest that almost all CPUT infringements can 2 legislation is shaping up and examines just what now be dealt with under Part 8. Who can obtain an enforcement Part 8 of the legislation allows trading standards order? officers to do Section 215 of the EA 2002 allows ‘enforcers’ (of which trading standards he Enterprise Act 2002 (EA is one) to apply to the court – either 2002) received Royal Assent in the county court or high court if the November 2002. The powers person against whom the order is sought Tafforded to trading standards fall under continues trading in England, Wales and Part 8 of the Act, entitled Enforcement Northern Ireland – for an enforcement of Certain Consumer Legislation, which order where there has been a domestic or came into force on 20 June 2003. community infringement. Part 8 does not provide any new An enforcement order is a form of substantive law for the protection injunctive relief and is a means of ordering of consumers, but it does provide a the recipient(s) not to breach the consumer streamlined procedure that allows protection legislation to which Part 8 those with enforcement powers to seek applies.3 Breach of an enforcement order injunctive relief, by way of an enforcement is a contempt of court and a defendant is order, where there has been a domestic liable to imprisonment (not exceeding two or community infringement of specified years) and/or a fine.4 consumer protection legislation. Historically, consumer protection in Enforcers the UK was achieved through criminal In brief summary, there are four categories prosecution, for example through the use of enforcers: general; designated; CPC; and of the Trade Descriptions Act 1968.1 community enforcers. Trading standards Legislation, such as Part III of the Fair departments fall under ‘general’ and ‘CPC Trading Act 1973, provided for injunctive enforcers’.5 type relief and, with the introduction of As a general enforcer, an application may the Stop Now Orders (EC Directive) be made in respect of any infringement.6 Regulations 1991, civil enforcement is now This includes seeking injunctive relief viewed as a clear alternative to criminal in the courts of another member state, enforcement. where the infringement originates in that The enforcement procedure in Part 8 is member state but affects UK citizens.7 based on the Stop Now Regulations, which Under section 225, general enforcers it replaced along with Part III of the Fair (other than the Office of Fair Trading) Trading Act 1973, and aimed to strengthen are provided with information gathering and widen the scope of the powers powers. This allows the enforcer to demand provided. Part 8 has subsequently grown in information from any person who may importance, with the introduction of the have relevant information.8 Consumer Protection from Unfair Trading CPC enforcers may make an application Regulations 2008 (CPUT), to the extent for an enforcement order in respect of August 2013 TSTODAY 35 IN DEPTH LEGAL PERSPECTIVES a community infringement.9 Section Regulations 2008 (SI 2008/1277) – lists services. The notion of collective interests 213(5A), which designates certain bodies a number of enactments, breach of which of consumers indicates that there must be and individuals as CPC enforcers, was amounts to a domestic infringement. some harm or risk of harm to the public inserted by Part 8 of the Enterprise Act Among the enactments listed are the generally, specifically the members of the 2002 (Enterprise Act (Amendment) Trade Descriptions Act 1968, the Consumer public who may buy the particular goods Regulations 2006 (SI 2006/3363). Credit Act 1974, the Sale of Goods Act or service in question.18 The purpose of this regulation was 1979 and the Supply of Goods and Services Whether a single infringement or to introduce into all member states a Act 1982. Furthermore, an act done or breach is enough to warrant seeking an similar regime to facilitate cross-border omission made in breach of contract for the enforcement order was addressed, in cooperation and enforcement to address supply of goods or services to a consumer will conjunction with the concept of harm community infringements. CPC enforcers also constitute a domestic infringement;13 to the collective interests of consumers, have additional powers in relation to search A community infringement is defined in in Office of Fair Trading v Vance Miller and seizure.10 s.212 of the EA 2002. Under the Enterprise [2009] EWCA Civ 34. It was held that it Trading standards is a ‘dual’ enforcer. Act 2002 (Part 8 Community might be possible for collective harm to be In these circumstances, it may act as the Infringements Specified UK Laws) Order established by a single breach. particular type of enforcer appropriate to 2003 (SI 2003/1374), as amended, and the the circumstances.11 For example, if there Enterprise Act 2002 (Part 8 Community Consultation and undertakings was a trader infringing both domestic and Infringements Specified UK Laws) Section 214(1) of the EA 2002 states that community legislation, trading standards Order 2006 (SI 2006/3372) certain UK an application for an enforcement order can act in its capacity as a general enforcer. enactments are specified that implement must not be made unless the enforcer has If only community breaches were involved, particular EU legislation.14 engaged in appropriate consultation with trading standards may choose to act as a Infringements can range from breaching the person against whom the order would CPC enforcer given the powers available the regulations on misleading advertising to be made, and the enforcer has given the in relation to search and seizure. breaching the regulation of the internet in OFT notice of their intention to apply for the ecommerce regulations.15 the order.19 Criteria for obtaining an One of the key differences between There is an option for the enforcer to enforcement order domestic and community infringements is seek a waiver of consultation from the To obtain an enforcement order, broadly that an application to a court can be made OFT under s.214(3) but this is reserved three criteria need to be satisfied: in the case of a community infringement for urgent cases – that is, there is clear and l The trader has engaged, or is engaging, where the enforcer believes a breach is immediate danger of serious consumer in conduct that constitutes a domestic or likely to occur in the future.16 harm, where there is no time to engage a community infringement, or is likely with the trader or engagement is seen as to engage in conduct that constitutes a Meaning of ‘harms the collective pointless. community infringement; interest of consumers’ Section 214(2) specifies what will be l There is, or has been, or is likely to ‘Consumer’ is defined in s.210 of the EA considered as appropriate consultation for be, harm to the collective interests of 2002. The meaning of ‘harms the collective this purpose, namely consultation intended consumers in the UK; interest of consumers’ was considered in to stop a violation occurring, preventing l There has been appropriate consultation the Office of Fair Trading v MB Designs repetition of a breach that either has that has failed to bring about the (Scotland) LTD [2005] SLT 691. The occurred or is occurring, or preventing a cessation for the conduct about which suggestion that the concept was based future community infringement. complaint is made, or the need to consult has been waived.12 The difficulties which have arisen [have been] largely Infringements due to inappropriate cases being chosen or there The infringements that can be addressed being undue delay by Part 8 are to be found in the following legislation: A domestic infringement is defined upon percentages of the population, Consultation should be embarked in s.211 of the EA 2002. Schedule 1 geography, or any statistical concept upon when the enforcer is satisfied that to the Enterprise Act 2002 (Part 8 was rejected.17 It was held that there the trader has engaged, or is engaging, Domestic Infringements) Order 2003 was collective harm when there was an in conduct that constitutes a domestic (SI 2003/1593) – as amended by the infringement and there was potential risk or a community infringement, or is Consumer Protection From Unfair Trading to purchasers of the defective goods or likely to engage in conduct that 36 TSTODAY August 2013 LEGAL PERSPECTIVES IN DEPTH constitutes a community infringement. However, Part 8 is potentially going CK STO Civil enforcement is ER The trader should be contacted and, to be subject to amendment. The recent TT HU in such communications, it would be now viewed as a clear Department of Business, Innovation and S advisable to specify that the enforcer is Skills consultation, which closed on 31 EV / alternative to criminal tan S instituting consultation, detailing the December 2012, is considering whether ay L enforcement O infringements/breaches found, specifying to amend Part 8 and extend its remit: the changes that the enforcer requires to instead of merely prohibiting a trader NICK be made and explaining when the duty to Acceptance of undertakings is at the from behaving in a particular manner, consult will end and the enforcer’s powers enforcer’s discretion. However, under consideration is being given to allow that can subsequently be utilised. section 217(4) the court must have regard remedies to be attached to enforcement The Enterprise Act 2002 (Part 8 to whether or not the person named in orders and undertakings.23 Request for Consultation) Order 2003 the application for an enforcement order The responses are currently the subject (SI 2003/1375) addresses how the initial has given undertakings, and whether or of consideration- we will have to await the request for consultation should be made, not they have complied with them.
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