Challenges in the Consumer Rights Bill

Alan Conroy identifies some of the key issues arising for local authorities and their trading standards teams out of the Consumer Rights Bill.

With the Consumer Rights Bill now with the House of Lords this may be a good time for local authorities, and particularly the Trading Standards Services (“the TSS”) to consider how they will address some challenges.

While the Bill is welcome news for consumers, some of the undoubted benefits will have a less positive impact on the TSS (and others of course). Bringing together the key provisions to protect consumers in respect of contracts for goods, services and digital content makes perfect sense when the numerous pieces of legislation that currently covers those areas is considered. Duplication will be reduced and greater certainty created for consumers, enforcers and traders. The law in relation to unfair terms in consumer contracts also gets a make-over in this new legislation and the proposals that introduce a clearer set of investigation powers which bring consistency across the consumer protection field are of themselves worthy of special attention. Although we must, as always, await the final version of the Bill and should not become overly excited until we know what form it will be enacted the broad provisions can be relied upon.

Of immediate concern must be the great reliance for enforcement on Part 8 Enterprise Act 2002 (“Part 8”). Logically this must be the case because this codification is about matters which are almost entirely contractual and thus Part 8 becomes the almost automatic choice. Part 8 is a powerful tool when used correctly but great attention has to be paid to enforcer’s tactics when applying it. Just as tactics can make the enforcer’s task more straightforward they can also be readily used by the defence to frustrate attempts to address bad conduct. Part 8 has not become as central a part of the enforcer’s toolkit as had been hoped when it was introduced in 2003. The causes for that are well enough known in the enforcement community but lack of a civil enforcement culture and only the most limited of Government support and guidance to the judiciary are perhaps the two most significant. The historical issues taken together with the extreme cuts in TSS personnel of recent years do not suggest the type of delivery mechanism exists to meet consumer expectations that will no doubt be raised as this Bill passes into law.

Another issue that will need to be addressed by the TSS in particular is that of disclosure. Consumers are given significant private redress rights in the Bill and they may well seek information held by enforcers in order to support their case. This is even more likely should class actions be brought and while the disclosure route in such circumstances is clear in s241A EA2002 there are still expressions of concern heard about the potential for DPA 1998 preventing it. Those concerns should be put aside and a properly constructed response to such a request which considers Part 9 EA2002 should not be the source of any concern to the ICO.

Another area that has some very serious implications for the TSS is that of Enhanced Consumer Measures (“ECMs”). That is a topic all of its own but it can be summarised as being measures which can either be incorporated in undertakings given by the trader to the enforcer or imposed by the Court. Until these modifications undertakings to the enforcer could only seek the trader's promise not to breach specific pieces of legislation and the court could only grant an Enforcement Order, a Prohibitory Injunction in all but name, to order no breach. The ECMs cover firstly redress provisions which can be for the trader to offer compensation or other redress resulting from the conduct leading to the undertaking or Enforcement Order. Secondly there is potential for compliance measures intended to prevent or reduce the risk of occurrence or repetition of the conduct. Lastly there will be the opportunity for Choice provisions with the aim of allowing consumers to choose more effectively between suppliers. An undertaking or Enforcement Order can only include such ECMs as the enforcer or court considers ‘just and reasonable’.

This then is the first problem because the view of what is just and reasonable is likely to differ widely between enforcer and trader. In the specific instance of the redress category an undertaking or Order can only include such measures if a) there has been loss and b) the cost of the measures to the trader is unlikely to exceed the sum of the losses to the consumers. The latter provision provides a massive difficulty insofar as assessment goes. The increased workload and need for time spent in identifying appropriate ECMs together with identifying the true loss and the costs to the trader might appear daunting to say the least at a time when enforcement authorities were fully resourced. As things currently stand daunting looks like an attractive position.

Additionally the unscrupulous trader may well purport to engage with enforcers in a debate about ECMs simply in order to delay the prospect of enforcement. The longer a discussion goes on the less likely it is that interim relief will be granted. In those circumstances a Court is likely to say that if the enforcer has been engaging for a period of time with the trader in pursuit of ECMs the matter cannot be viewed as urgent. The problems associated with identifying who has suffered what loss and how much the redress measures will cost the trader need no further exposure here.

There are some additional measures which perhaps should be incorporated into any debate or training on these issues. The draft Consumer Protection from Unfair Trading (Amendment) Regulations 2013 will introduce further rights of redress where the trader engages in a prohibited practice in relation to a product that the consumer has contracted with them for. A prohibited practice is expressed as a misleading action under Regulation 5 or an aggressive practice under Regulation 7 of the Consumer Protection from Unfair Trading Regulations 2008 (“the CPUTRs”). There are likely to be similar disclosure issues arising here as under the Bill. This part has been paraphrased because this area once again requires a much more detailed analysis and the intention here is simply to flag up the coming issues for the TSS in particular.

While there are steps that enforcers can take to prepare for these changes there is also a pressing need for clear guidance to the courts and a Practice Direction for England & Wales and for Northern Ireland and Rules of Court for Scotland for Part 8 EA2002 is long overdue. The lack of a PD/Rules of Court have been glaring omissions for over 10 years and these very significant changes demand that it be re-visited. Both local preparation and central Government support needs to be addressed sooner rather than later.

Alan Conroy is a Barrister with a long association with the Trading Standards Service. He practices from Church Court Chambers in London and also independently. He is contactableThis email address is being protected from spambots. You need JavaScript enabled to view it..