Turning the tables

A rare opportunity exists for local authorities to both enforce and gain business approval at the same time, argues Alan Conroy.

Regulation and enforcement are regularly the subject of tension between local authorities and elements of the business community. That is unavoidable given the complexities of the regimes that all have to work with and within.

There is however one, still relatively unknown, piece of legislation where enforcement will be attractive to legitimate businesses. In 2008, along with new laws for consumer protection, local authorities were given a wide reaching new power to deal with those traders that prey on other businesses.

Older readers will remember the carbon paper scams of the 1960s and 70s but the range of deliberately misleading B2B activities has grown dramatically. Fake invoices for goods not delivered and services not received are still common of course. Alongside those activities we have misleading invitations to buy advertising space, frequently with false claims that the seller is working with the police, trading standards etc. There are many more examples of course and the creativity of the business scammer is every bit as well developed as in those that target the consumer. The damage is often just as great because small and medium sized businesses frequently do not have time to check everything as thoroughly as they might want and by the time they have paid the money it is often too late to recover it anyway.

The Business Protection from Misleading Marketing Regulations 2008 (“the BPMMRs”) contains a core provision, in Regulation 3, that prohibits misleading advertising that :

….in any way, including its presentation, deceives or is likely to deceive the traders to whom it is addressed or whom it reaches; and by reason of its deceptive nature, is likely to affect their economic behaviour; or

….for those reasons, injures or is likely to injure a competitor.

The use of the term ‘advertising’ has been the subject of some criticism leading as it does to assumptions about precisely what it is that has been prohibited. The definitions contained in Regulation 2 though deal with this clearly by stating …“advertising” means any form of representation which is made in connection with a trade, business, craft or profession in order to promote the supply or transfer of a product and “advertiser” shall be construed accordingly;"

In other words if one trader says, does or implies anything that is either untrue or miselading in order to try and sell its product or service then the prohibition is breached. It is notable that the trader is not required to succeed and so once the misrepresentation has been issued the offence is complete. There seems no reason why silence on a particular issue could not offend against the Regulations given that Regulation 3 includes "..….in any way, including its presentation…".

This is a fairly standard piece of criminal legislation and there seems little doubt that the legislators had the criminal route in mind as the starting point. The ability to prosecute for the offences is though enhanced by Regulation 15 which empowers a local authority to seek an injunction where it considers there has been or is likely to be a breach of the BPMMRs.

There is frequently some confusion with the injunctive powers for consumer protection contained in Part 8 Enterprise Act 2002 and care must be taken not to confuse the two sets of powers. The BPMMRs injunctive route is entirely separate from Part 8 EA2002 but of course the processes and documents used for Part 8 actions can be plagiarised heavily for BPMMRs purposes. Many of the general principles such as consultation, acceptance of Undertakings and Interim Injunctions are essentially the same. Further powers to make test purchases, obtain information and enter and inspect are all contained in the Regulations and follow the same pattern as similar earlier legislation.

Although there have been relatively few cases one does stand out as a particularly useful precedent. In London Borough of Croydon v Austin Hogarth [2011] EWHC 1126 (QB), 5 April 2011 the High Court granted Injunctions to prevent the sending out of letters purporting to be for the renewal of non-existent contracts for maintenance and repair of certain types of office equipment. This case was unreported but a précis of the case can be obtained by emailing the writer.

This is one of the rare opportunities for local authorities to enforce in a win-win situation. The intention of the legislation is to target those traders who have no other function but to mislead others and that is good news both for their innocent business victims and consumers who eventually pay for B2B malpractice.

There is a great deal of help available in this area for the Trading Standards Service and their in-Council Legal Advisers. A dedicated LinkedIn Group is available for technical discussions and sharing best practice. Anyone interested is invited to contact Alan via This email address is being protected from spambots. You need JavaScript enabled to view it. or via Linked In.

Alan Conroy spent some 20 years at the OFT before leaving in March 2010 to go into private practice at 7 Bell Yard Chambers. For the last nine of those years he had the principal responsibility for assisting the Trading Standards Service with use of the EA2002, the BPMMRs, the CPUTRs and certain other legislation. He is a Member of the TSI and has contributed to publications including the latest version of Trading Standards Law & Practice. Alan is currently seconded to Medway Council Litigation Team.