99 Problems… illegal ice cream trading and injunctions

Adam Blenkinsop and Katy Kidd report on Lambeth Council’s recent success in obtaining injunctions against unlicensed ice cream traders in London’s South Bank, and outline the legal framework for local authorities bringing such actions.

“Ice cream is exquisite. What a pity it isn’t illegal” – Voltaire

Background

The South Bank area of London is one of the most popular destinations in the UK, boasting iconic sites such as County Hall, the London Eye, Royal Festival Hall and the National Theatre. However, due to this popularity the area has also become a focus for illegal street traders, with unlicensed ice cream vendors being amongst the most prolific and persistent offenders.

Whilst this illegal trading might have pleased Voltaire, it has caused serious and wide ranging problems for the London Borough of Lambeth (“Lambeth”) and its residents, including: noise; exhaust fumes; litter; obstructions to public transport, emergency services and other traffic; safety risks; food safety and hygiene concerns; the charging of high or unadvertised prices; and the diversion of enforcement officers and police from their other duties.

A single unlicensed ice cream van can generate profits of up to £3,000 a day, and it is therefore unsurprising that the usual enforcement options of issuing Fixed Penalty Notices of £90, and/or prosecutions in local magistrates’ courts which typically result in fines in the order of £50-£200, have proven of little or no deterrent to such trading.

In May 2012, with the peak summer tourist season and the Olympic and Paralympic Games approaching, Lambeth issued High Court proceedings to seek permanent prohibitory injunctions against two of the most persistent offenders. On-notice applications were also made seeking interim injunctions to restrain the illegal trading pending trial of the claims.

The sanctions which can be imposed by the Court for breach of an injunction include an unlimited fine, seizure of goods, and/or imprisonment for up to two years, and are therefore a far more robust deterrent.

Regulation of street trading and itinerant ice cream trading

Street trading in boroughs outside London is regulated by Schedule 4 of the Local Government (Miscellanous Provisions) Act 1982 (“the LGMPA”), and in London by private Acts – Part III of the London Local Authorities Act 1990 (as amended) (“the LLAA”) and the City of Westminster Act 1999.

Other private bills which extend the scope and enforcement powers available under the LGMPA have also been introduced to parliament by 11 local authorities outside London, including Manchester, Leeds, Liverpool and Newcastle councils. Getting these private bills onto the statute books is an expensive and time consuming process, and the Department for Business Innovation and Skills (BIS) has recently consulted over proposals to introduce new national legislation to try and avoid the need for further piecemeal legislation. Details can be found on the BIS website.

Lambeth is one of 32 London Authorities who are ‘participating councils’ under the LLAA. Key provisions in relation to street trading and itinerant ice cream trading include:

Street Trading

• s.21(1) defines ‘Street Trading’ as ‘(a) the selling or the exposure or offer for sale of any article (including a living thing); and (b) the purchasing or offering to purchase any ticket; and (c) the supplying of or offering to supply any service, in a street for gain or reward (whether or not the gain or reward accrues to the person actually carrying out the trading).’
• s.24 enables participating councils to designate specified streets as ‘Licence Streets’, and there are further detailed provisions governing the grant, renewal and revocation of licences.
• s.38(1) makes it an offence, subject to a fine up to level 3 on the standard scale (currently £1,000), to engage in street trading anywhere in the borough of a participating council unless licensed to do so, and acting within the temporal or geographical scope of that licence.

Itinerant Ice Cream Trading

• s.21(1) defines ‘itinerant ice cream trading’ as ‘ice cream trading from a vehicle which goes from place to place in the course of trading for periods of 15 minutes or less and not returning to that location or any other location in the same street on the same day.’
• s.37(1) provides an exemption to the blanket ban at s.38(1) in relation to itinerant ice cream trading unless (a) the street has been designated as a ‘Licence Street’ for street trading generally, or (b) the street has been designated as a ‘Prohibited Street’ for the purposes of itinerant ice cream trading specifically. In either of those circumstances it is only lawful to trade if licensed and acting within the scope of that licence.
• s.37(2) empowers the participating councils to designate particular streets as ‘Prohibited Streets’ for the purposes of itinerant ice cream trading.

Lambeth has designated certain streets within the South Bank area as ‘Prohibited Streets’, and has granted licences for trading at four tourist hot spots including Westminster Bridge and the Jubilee Gardens by the London Eye.

The legal framework

Lambeth’s claims were brought pursuant to s.222 of the Local Government Act 1972, which makes provision for local authorities to pursue claims in their own names for the benefit of local residents. This provision also entitles local authorities to seek injunctive relief, as confirmed by the House of Lords in Stoke-on-Trent BC v B&Q Retail Ltd [1984] 1 AC 754 at 774A-B.

The key criterion for whether injunctive relief should be granted in cases where there have been breaches of the criminal law was stated by Bingham LJ in City of London Corp v Bovis Construction Ltd [1992] 3 All ER 697 at 714h-j: "The essential foundation for the exercise of the Court’s discretion to grant the injunction is…that the defendant’s unlawful operations will continue unless and until effectively restrained by the law and that nothing short of an injunction will be effective to restrain them."

If this foundation can be established then the Court has a wide discretion to grant an injunction, which will be exercised having regard to all the facts of the case, including the interests which the injunction is intended to protect.

The Court will then consider the conventional principles governing interim injunction applications, as stated in American Cyanamid Co v Ethicon [1975] AC 396:

1. Is there a serious question to be tried?
2. Are damages an adequate remedy for the Claimant?
3. Where does the balance of convenience lie as to whether or not an injunction should be granted?

In most cases the Court will also consider whether the claimant should be required to give a cross-undertaking in damages to the defendant, should the defendant suffer loss as a result of the interim injunction and it be determined later in the proceedings that an interim injunction should not have been granted. Cross-undertakings were not sought (or offered) in Lambeth’s claims as the injunctions only sought to restrain an illegal activity.

Evidence

It is important that applications for interim injunctions are supported by clear and detailed evidence to show that ‘nothing short of an injunction will be effective’ to restrain the behaviour complained of. In these cases Lambeth demonstrated wilful and persistent unlicensed trading by the Defendants, despite numerous prior prosecutions, Fixed Penalty Notices, and run-ins with enforcement officers. One of the Defendants had continued to trade illegally after having applied unsuccessfully for a street trading licence.

Evidence submitted in support of Lambeth’s applications included:

• Summary schedules of previous enforcement action against the Defendants, and copies of relevant prosecution documents and Fixed Penalty Notices.
• Enforcement Officer foot patrol records and photographs.
• Diaries of licensed traders’ observations of the unlicensed trading.
• Impact statements by local businesses and residents, enforcement officers and police officers.

Interim injunctions ordered

On 13 June 2012 Mr Justice Sweeney, sitting in the High Court, granted Lambeth’s applications for interim injunctions against the Defendants[i]. The injunctions prohibit the Defendants from engaging in unlicensed street trading or itinerant ice cream trading within the specified ‘Prohibited Streets’ area, or from using or being present in any ice cream van or other vehicle intended for use in street trading within that area save for very limited access for the purpose of travelling through the area. The injunctions also apply to the servants, employees, agents, licensees and current business associates of the Defendants.

Comment

It was clear in these cases that the usual enforcement actions of prosecutions and/or the issue of Fixed Penalty Notices pursuant to s.38 LLAA were insufficient to deter the Defendants.

Local authorities facing similarly persistent illegal trading should also consider seeking injunctive relief and the far tougher attendant sanctions which apply. To be successful such proceedings must be supported with comprehensive evidence to satisfy the Court that the Bovis and American Cyanamid principles outlined above are met, and that it is just an equitable for the Court to exercise its discretion and grant the injunction(s) sought.

Local authorities should also consider carefully at the outset the risks of any cross undertakings in damages which might be required to be given to the proposed defendants.

Local authorities should use a proportionate approach to tackling illegal street trading – including being prepared to take the tougher measures of seeking interim and permanent injunctions against the worst offenders if standard enforcement methods have proven ineffective.

Katy Kidd is a partner in the Dispute Resolution team at Steeles Law, and can be contacted on 01603 598000 or by This email address is being protected from spambots. You need JavaScript enabled to view it..

Adam Blenkinsop is a solicitor in the Dispute Resolution team at Steeles Law, and can be contacted on 01603 598000 or by This email address is being protected from spambots. You need JavaScript enabled to view it..