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CLAIRE ANDREWS AND IAIN MACDONALD GOUGH SQUARE CHAMBERS

CLAIRE ANDREWS AND IAIN MACDONALD GOUGH SQUARE CHAMBERS

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Page 1: CLAIRE ANDREWS AND IAIN MACDONALD GOUGH SQUARE CHAMBERS

CLAIRE ANDREWS AND IAIN MACDONALD

GOUGH SQUARE CHAMBERS

Page 2: CLAIRE ANDREWS AND IAIN MACDONALD GOUGH SQUARE CHAMBERS

Enforcement options◦ Informal resolution

Warning letters, meetings etc◦ Formal resolution

Caution Prosecution

Page 3: CLAIRE ANDREWS AND IAIN MACDONALD GOUGH SQUARE CHAMBERS

Civil route◦ CPRs/ EA 2002

Undertakings Enforcement order

Criminal route◦ Caution◦ Prosecution◦ Confiscation

Page 4: CLAIRE ANDREWS AND IAIN MACDONALD GOUGH SQUARE CHAMBERS

The Consumer Protection (Amendment) Regulations 2014 ◦ Coming into force on 1 October 2014◦ Amendment of the CPRs by adding new

Part 4A◦ Gives a right to redress for consumers in

relation to Misleading actions under reg. 5 Aggressive commercial practices under reg.

7

Page 5: CLAIRE ANDREWS AND IAIN MACDONALD GOUGH SQUARE CHAMBERS

Consumer Rights Bill◦ Third reading in the House of Commons on

16 June◦ Committee stage in the Lords in October◦ Coming into force October 2015?

Schedule 7◦ Enhanced consumer measures

Redress Compliance Choice

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Not a TSD enforcement power as such, but consumers may well want to know their rights◦ First requirement – either:

A B2C contract; A C2B contract; or A payment by C to B

◦ Second requirement: A prohibited practice by the trader; or A prohibited practice by the producer of the goods/

digital content of which the trader is or could reasonably be expected to be aware

◦ Third requirement The prohibited practice is a significant factor in C’s

decision to buy the product or make the payment

Page 7: CLAIRE ANDREWS AND IAIN MACDONALD GOUGH SQUARE CHAMBERS

The right to unwind◦ A 90 day period to reject

Unless goods/services fully consumed or performed

◦ Trader has to provide a full refund May be reduced in certain limited

circumstances ◦ Consumer has to make rejected goods

available for collection◦ In the case of a demand for payment, the

consumer is entitled to return of that payment

Page 8: CLAIRE ANDREWS AND IAIN MACDONALD GOUGH SQUARE CHAMBERS

A discount◦ A sliding scale, depending on the

seriousness of the prohibited practice, from 25% up to 100%

◦ How do we determine how serious the practice was? Behaviour of the trader Impact of the practice on the consumer Passage of time

Page 9: CLAIRE ANDREWS AND IAIN MACDONALD GOUGH SQUARE CHAMBERS

Damages◦ Financial loss from the prohibited practice◦ Alarm, distress, physical inconvenience or

discomfort Limited to loss which was reasonably

foreseeable No right to damages if trader has a

due diligence defence

Page 10: CLAIRE ANDREWS AND IAIN MACDONALD GOUGH SQUARE CHAMBERS

How many consumers will feel able to bring such a claim?◦ All likely to be small claims◦ Legal representation unlikely to be

available Will such claims be parasitic on TS

action?◦ Much easier for consumer to prove the case

if trader has been prosecuted or had an enforcement order made against them

◦ Is there a risk of pressure on prosecuting authorities?

Page 11: CLAIRE ANDREWS AND IAIN MACDONALD GOUGH SQUARE CHAMBERS

An additional element to EA 2002 and enforcement orders◦ Will apply to orders, court undertakings and

undertakings given under s.219 to the enforcer

◦ Directed at: Redress Compliance Choice

◦ Only such measures as are “just and reasonable” may be included

◦ Enforceable by the Court as part of an order or court undertaking

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Only available in a “loss” case, i.e. where consumers have suffered a loss

Types of order which may be made:◦ measures offering compensation or other

redress to consumers who have suffered loss as a result of the conduct

◦ where the conduct referred to relates to a contract, measures offering such consumers the option to terminate (but not vary) that contract,

◦ where such consumers cannot be identified, or cannot be identified without disproportionate cost to the trader, measures intended to be in the collective interests of consumers

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Measures intended to prevent or reduce the risk of the occurrence or repetition of the conduct to which the enforcement order or undertaking relates (including measures with that purpose which may have the effect of improving compliance with consumer law more generally).

Such as?◦ appointing a compliance officer;◦ introducing a complaints handling process;◦ improving their record keeping;◦ signing up to an established customer review / feedback site;

or◦ publicising details of the breach or potential breach, and what

they have done to put the situation right in the local or national press or on social media.

Could it go as far as telling the trader to sack an employee (or a director)?

Page 14: CLAIRE ANDREWS AND IAIN MACDONALD GOUGH SQUARE CHAMBERS

Measures intended to enable consumers to choose more effectively between persons supplying or seeking to supply goods or services

Same examples given in the Explanatory Notes as with compliance category

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Consider a certain payday lender recently in the news◦ £2.6m compensation payable to affected

borrowers But what if they do it again in 2015?

◦ Prosecution plus confiscation?◦ EA 2002 order plus redress and

compliance measures?◦ Claims by individual consumers (for more

than £50)?