Courts to have beefed-up powers to deal with breaches of consumer law

Courts could be given a wider range of powers to deal with cases where the rights of consumers have been breached, under proposals issued for consultation by the Department for Business, Innovation and Skills.

In a consultation paper entitled Civil Enforcement Remedies issued this week, DBIS has proposed extending the range of remedies covered by enforcement orders and undertakings in consumer law.

The consultation suggested that when purchases of goods or services go wrong, individual remedies for consumers were currently limited.

“For many breaches of consumer law, the main formal sanction is criminal prosecution of the trader by the enforcer,” the paper said. “That benefits consumers generally, because it prevents the spread of instances of illegal trading, but often provides no direct remedy to victims of the breach nor secures any guarantee that the trader will not reoffend (although many enforcement officers do work to secure this informally).”

DBIS highlighted how certain enforcers could, as an alternative to criminal prosecution, seek injunctive relief against infringements of consumer protection legislation.

However, it described the injunctive power as “limited” and said there was a clear gap between what it could do and a full prosecution.

The Department added that the acceptance of undertakings was proportionate for minor and inadvertent consumer law infringements, but did not “give remedies to individual consumers or always secure positive action by businesses”.

The consultation paper said the Government believed the public enforcement regime could be modified with the aim of achieving the following outcomes:

  • increased business compliance with the law;
  • improved redress for consumers affected by the breach; and
  • more confident consumers who are empowered to exercise greater consumer choice.

DBIS said it had reviewed the scope for using the powers for consumer law contained in the Regulatory Enforcement and Sanctions Act 2008 and was not convinced they would be effective in consumer law.

“Firstly, much of the focus of the RES Act is on the use of penalties as an ultimate sanction, which, while effective, do not in themselves secure remedies for individual consumers,” it said.

“Secondly, the Government has concerns that a purely administrative approach does not guarantee sufficient right to respond for businesses who are innocent. Under the RES Act, the business must appeal against a decision of the enforcer, and the Government believes that in disputed cases it should be for the enforcer rather than the business to bring the first legal challenge.”

The Department said the Government was therefore consulting on an option of extending the range of remedies covered by enforcement orders and undertakings in consumer law.

“This would enable a court to impose an enforcement order – or for parties to agree an undertaking where a breach of the law is not disputed – aimed at securing one or more of the above outcomes of redress, compliance or a better functioning market, in addition to stopping the infringing practice,” it suggested.

DBIS claimed that under the proposals, “where a consumer has lost a sum of money due to a business breaking consumer law, whether it is through overpayment or being mis-sold something, consumers would get that money back.” 



Exact remedies would be decided on a case-by-case basis. DBIS said it was hoped that businesses and enforcers would be able to agree remedies between them, but where this was not possible the enforcer would be able to take the matter to court.

According to the consultation paper, possible remedies to secure greater business compliance with the law could include businesses:

  • Signing up to a Primary Authority scheme;
  • Appointing a compliance officer;
  • Providing training/preparing guidance to staff;
  • Undertaking internal spot checks (and maintaining records of these);
  • Improving record-keeping;
  • Collecting (and acting on) customer feedback;
  • Introducing a robust customer complaints-handling scheme; or
  • Signing up to an ADR scheme for future complaints and committing to be bound by decisions of an independent ADR provider.

Consumer Affairs Minister Jo Swinson said: “Too often consumers are short changed as the result of criminal prosecutions under consumer law: currently a business is condemned and fined, but nothing is done to repay the money lost by the customer. Instead, customers are forced to foot the bill for costly and time consuming legal action to get their money back. 



“When consumers, especially vulnerable consumers, have been wronged they should be able to have free access to justice quickly and simply. With these proposals, when a business has infringed your rights as a consumer the court will make sure they reverse the damage and give consumers their money back. This will put the balance back in the system, and give consumers more power to exercise their choices confidently.”



The consultation closes on 31 December 2012. The changes would be brought in under the Consumer Bill of Rights, which could be introduced next year.

DBIS cited two examples of how these changes could work:

  • “If a company was found to have overcharged all its customers for the guarantees it sold with a washing machine, that company could be asked to write to all its customers informing them of their right to a sum of money if they send back a tear-off slip within a certain time; and


  • After a company mis-sold insurance with its coffee machines and ignored complaints, as well as fixing the individual problem it will have to make sure it changes its sales and complaints policy so that other customers don’t get the same problem.”

Philip Hoult