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									Featured Articles
Child Restraints New Law
When the Home Authority disagree with a Prosecution Chief Medical Officer Recommends shake up of GMC Fitness To Practice panel CASE REVIEW Powys County Council – V- David Halsall International limited The ‘ROHS’ and ‘WEEE’ directives
Contacts Snr Clerk: Catherine Grimshaw cg@stpaulschambers.com Editors: Alun Jones ajj@stpaulschambers.com Jeremy Barne� jb@stpaulschambers.com Designer: Richard Wright rw@stpaulschambers.com


Issue 3 October 2006

This edition of the Regulatory Breach newsletter continues to expand on the success of the first two editions. We hope that the articles in this edition will be of relevance and assistance to our regular clients and also to those who we have not yet had the opportunity of working with. The most significant new regulation concerns the new European electrical waste and hazardous substances Directives. It is clear that these will affect many importers, suppliers and manufacutures in a number of areas including IT systems integrators, telecoms, toys and electrical goods. This issue contains articles discussing the new General Medical Council disciplinary regulations, in particular the Surgeon-General’s proposals. The proposals are not widely supported but, if they come into force, they will have a significant impact on lawyers practising in the disciplinary field. Also in this edition is an interesting article on the potential conflict that can arise when the home authority offers advice which complies with a regulation yet the prosecuting authority allege the advice is non-compliant. Does this provide a defence or merely legal argument? We also consider the new seat belt regulations, which have had recent widespread cover in the motoring press. The Regulatory Breach team continue to receive instructions in many regulatory areas and from around the country including the midlands and the south coast. Some of these cases form the basis of articles in this edition and we hope to provide helpful material. However, we are always pleased to receive feedback on the newsletter and also to receive suggestions as to future articles so that we may continue to provide a relevant and helpful newsletter. Alun Jones

Legal 500 say “St Pauls Chambers an Early mover into the regulatory market, Jeremy Barne� has built a solid group in which,”succinct and well-prepared” Jason MacAdam has built a niech in inquest work”

Child Restraints - New Law
Jeremy Barnett New regulations governing the use of child car seats came into force on 18 September 2006. Child and baby seats must meet a standard known as UN ECE regulation 44.03, this means they will be marked with an E and the numbers 44.03, or .03 In summary the new requirements, set out in EC Directive 2003/20/EC, are that: • All children under 3 years old must use an appropriate child restraint when travelling in any car or goods vehicle (except in the rear of a taxi if a child seat is not available); Children aged 3 or more years old and up to 135 cm (approx 4 � 5 inches) in height or 12th Birthday, which ever they reach first must use an appropriate child restraint when travelling in cars or goods vehicles fi�ed with seat belts (few exceptions are permi�ed); Rear-facing baby seats must not be used in seats with active frontal air-bag; Where seat belts are provided, the number of people carried in the rear of vehicles may not exceed the number of seats available fi�ed with seat belts or child restraints (to apply from May 2009). UN ECE 44.03 or later standard child restraints must be used from May 2008.


• •


Three exceptions allow these children to travel in the rear and use an adult belt- in a taxi, if the right child restraint is not available; - for a short distance in an unexpected necessity, if the right child restraint is not available; - where two occupied child seats in the rear prevent the fitment of a third child seat. The penalty is a fixed penalty notice £30 or a maximum fine of £500 if the case comes to court. There is an exception for cases of an unexpected necessity for a short journey in a car, but this is not expected to cover regular school runs or other journeys. Can second hand seats and boosters be used? They need to check whether they are to the up-to-date UN ECE 44.03 or later standard. Do they have the correct fi�ing instructions, and have they been in a crash already? Do the reguations apply to children who weigh more than 36 kg? adult belt? No. The legislation is clear that height is the measure to decide whether to move up to the adult belt. Using a booster cushion and the adult belt even if a child is over 36 kgs is far be�er than using the adult belt alone.Some vehicles are fi�ed with sideways rear facing seats. A child restraint in such a seat does not meet the legal requirements as the seat has to be fi�ed to an approved anchorage. However, it may be that such seats are certified to UN ECE 44.04 type approval standards, which means that they effectively approved child seats/booster sets themselves and therefore a separate child seat/booster would not be needed. Stephen Ladyman, Road Safety Minister said: � the right one; and not to use an adult belt before the child is big enough. “� Children who have grown out of child seats still need to use booster seats and booster cushions. “We estimate that these changes could prevent over 2000 child deaths or injuries each year.”

When the Home Authority disagree with a Prosecution
Jeremy Barnett Gloucestershire Trading Standards v Jemella Ltd t/a GHD. Solicitors McCormicks, Leeds. A recent prosecution arising out of perceived electrical failures following test purchases of hair straighteners, demonstrated the difficulties faced by manufacturers when different trading standards authorities form conflicting views of technical compliance in relation to the same issues. In this case, Gloucestershire Trading Standards submi�ed hair straighteners to a electrical test house, who undertook certain tests of against regulation 14(1) of the Electrical Equipment Safety Equipment Regulations 1994, concerning creepage and clearance tolerances, designed to deal with safety of consumer items. Certain complaints were made by an experienced test house. These were then considered by an other experienced test laboratory consulted by the defendant company. Following a detailed review of the history and development of this early model, the defendant’s test house concluded that the items were safe, and criticised the findings and methodolgy of the prosecution experts. In order to satisfy themselves that the products could remain on the market pending the outcome of the prosecution, the defendant company undertook further tests and consulted their home authority, who concluded that the complaints made did not render the items unsafe, and placed guidance on their web site, informing potential customers of their decision. This guidance contradicted the position taken by the prosecution authority, and may well have resulted in an unfortunate situation arising, where conflicting evidence would have been given to the court as to perceived levels of safety from different trading standards authorities. Although it is unusual for trading standards officers to be called on behalf of the defence, this has occurred from time to time in cases of national importance. This ma�er was resolved at court by the defendants accepting certain minor technical fails, pointing out that there had been no ca court that these early models were no longer on the market. A small fine was imposed, together with an order for costs against the defendant. It would seem that such conflicts of views of trading standards areas may become a thing of the past. The present law discourages reliance upon the home authority, see David Taylor v Lawrence Fraser (Bristol) Limited, [11th October 1977 ], the Court of Appeal including the Lord Chief Justice held, “simply because [the defendants] have proper relations with the enforcing authority, they cannot in some way shuffle off on to the enforcing authority their responsibility to take precautions” A new compliance code for regulators was announced in the April Budget, based on Philip Hampton’s report, Reducing the Administrative burdens: Effective inspection and enforcement. The code brings about a wholesale change to the principles of the home authority regime with regular visits and contact between the Trading Standards and their local businesses. The main changes in procedure are; • Risk assessment – all elements of regulators compliance work including advice, data gathering, inspection and enforcement must be based on thorough and open assessments of risk. Open risk assessment means that regulators must allow businesses and others to scrutinise and consulted on risk management methodologies. • Inspection – no inspection should take place without a reason. This should include an element of random inspection and must minimise burdens on business through joint inspection and data sharing. • Data requirements – businesses should not have to give unnecessary information • Handling of suspected breaches – must be proportionate to the risks, they must work with businesses who are honestly trying to comply with the law, and, except where immediate action is necessary, allow the company to discuss the circumstances of the breach and try to resolve it. Consideration should be given to whether or not the penalty route they propose is proportionate to the offence, outcome and culpability of offender. • Advice - this must be confirmed in writing if required. The initial dra�, which is available on www.cabinetoffice.gov.uk, if adopted in its present form, will bring a dramatic change in the enforcement regime, in that the home authority will be required to play a more pro active role in the decisions of importers and manufactures, and any guidance given, as in the above case, would be capable of constituting binding advice, upon which reliance could be made. In future, companies who co operate with their home authority may find that they have fulfilled all of the requirements necessary to rely upon the defence that they have acted with all due diligence.

Court of Appeal

R v Balfour Bea�y Rail Infrastructure Services Ltd. The ‘Hatfield train Crash’ occurred on 17th October 2000 when a train travelling to Leeds rounded a bend in the track at 115mph. 2 sections of the track disintegrated, the train derailed and caused significant injuries to passenger along with fatalities. Railtrack were responsible for operating the track network. Balfour Bea�y were responsible for inspecting the track. They failed to properly inspect the track and further they failed to appreciate the results of the inspection. Balfour Bea�y pleaded guilty to one offence of failing to discharge the duty as an employer to persons not in its employment (s.3(1) Health and Safety at Work Act 1974). They were sentenced to a £10million fine and ordered to pay prosecution costs in the sum of £300,000. The Defendant appealed the sentence. It was submi�ed: i. that the Judge had erred in concluding the failure as one at the top of the scale; ii. the assessment of culpability between Railtrack and Balfour Bea�y was incorrect; and iii. the amount of fine was excessive as no credit for plea was given. The Court of Appeal largely rejected the Appellants first 2 submissions and supported the trial Judge’s view. The Court stated that the £10 million fine was not wrong in principle given that Balfour Bea�y were party to a 7 year contract worth £368 million. However, the Court acknowledged that the fine should be reduced on the grounds of disparity between the £3.5 million fine received by Railtrack. Most interestingly, the Court did not interfere with the trial Judges decision to withhold any credit for the guilty plea. Balfour Bea�y pleaded guilty on the 93rd day of the trial, immediately a�er the manslaughter charges had been dismissed. The Appellant submi�ed that it was reasonable not to plead to anything when the manslaughter charges were still active so “not to contaminate the jury’s mind”. Accordingly, the plea was entered at the first reasonable opportunity. The Court of Appeal roundly rejected that submission and agreed with the trial Judge who refused to award any credit as the decision not to plead to the current ma�er was a tactical decision and that Balfour Bea�y should have been aware of the consequences Accordingly, the fine was reduced to £7.5 million Perhaps the important point from this case is the possibility of making an offer of a plea to the prosecution, even if it was rejected by the prosecution. If the prosecution reject the offer but it transpires that that becomes the final situation, there is a good argument to request maximum credit. If that had been the case, Balfour Bea�y may have saved up to £3.3 million pound. Quite an expensive question not to ask! Moon v Garre� & Others. It was the occupier of land where the accident happened and not the employer of the worker who was liable under the Construction (Health, Safety and Welfare) Regulations (SI 1996 No. 1592) for injuries suffered by the worker delivering blocks even though the occupier did not order the worker to deliver them.


Recent Legislation
Alun Jones The Medicines (Advisory Board on the Registration of Homoeopathic Products) Amendment Order 2006 This Order amends the Medicines (Advisory Board on the Registration of Homoeopathic Products) Order 1995, to extend the functions of the Advisory Board on the Registration of Homoeopathic Products to include the provision of advice on the safety, quality and efficacy of homoeopathic medicinal products which have a product licence of right, or national homoeopathic products which have a marketing authorisation or in respect of which an application for such an authorisation is made. A national homoeopathic product is a homoeopathic medicinal product which is not eligible for the procedure for registration under the Medicines (Homoeopathic Medicinal Products for Human Use) Regulations 1994 and which is for the relief or treatment of minor symptoms or conditions. The Measuring Instruments (Taximeters) Regulations 2006 (No. 2304) These Regulations implement Directive 2004/22/EC of the European Parliament and of the Council on measuring instruments in relation to taxi meters, which are measuring instruments covered by the Directive. The Regulations apply, with certain exceptions, to taxi meters intended for use for the protection of the consumers which are first placed on the market or put into use on or a�er the 30th October 2006. The regulations ensure that there is conformity for manufacturers. It is an offence under regulation 4(2) to place on the market and put into use a taxi meter without complying with the requirements of regulation 4(1). The regulations confer powers on the enforcement authorities to take action in respect of noncompliant taxi meters. It provides a power of entry and inspection for enforcement officers and provides for offences relating to the obstruction of an enforcement officer. A person guilty of an offence under Part 2 or Part 3 is liable on summary conviction to a fine not exceeding level 5 on the standard scale (which is currently £5,000). A defence of due diligence in relation to any offence under these Regulations is provided for and the liability of persons other than the principal offender is set out in regulation 23.

Alun Jones


Court of Arbitration for Sport
(1) Russian Olympic Commi�ee (ROC) and (2) Mr. Viatcheslav Ekimov -v(1)International Olympic Commi�ee (IOC) and (2) United States Olympic Commi�ee and (3) Mr. Tyler Hamilton In August 2004, Tyler Hamilton, a cyclist representing the USA, participated in a cycle time trial race for the Athens Olympics. He finished in first place with Viatcheslav Ekimov finishing second. The following day, Mr. Hamilton provided 2 blood samples (‘A’ & ‘B’) as part of the routine anti-doping tests. The result of the A sample was negative, though it suggested that Mr. Hamilton had recently received a blood transfusion. An investigatory commi�ee was established by the President of the IOC. The B sample was therea�er tested but the results of the B sample were inconclusive due to lack of enough intact red blood cells. The Appellants sought orders for Mr. Hamilton to be stripped of his gold medal and the finishing order to be adjusted, such that he was declared the gold medallist. Mr. Hamilton, the USA Olympic Commi�ee and the IOC were joined as co-respondents. The Appellants submi�ed that the decision not to pursue the ma�er was not a decision as it had not been made as the result of a hearing. Secondly, they submi�ed that by dissolving the decision making panel, no decision was reached. The respondents submi�ed that the decision was valid and that, in any event, the Appellants have no locus standi. The arbitrational rejected the submissions of the Appellants and also ruled that they had no locus standi to hear the appeal in any event. Accordingly, the merits of the case were not addressed.

Financial Services and Market Tribunal
Ravi Manchanda v Financial Services Authority The applicant applied to the respondent to be a director within a mortgage brokering company, Diamond Lifestyle Ltd. The respondent refused the applications. The applicant had been a director in a US firm with a London Base, RBG Resources Plc. (RBG) which had incurred losses in excess of US$ 400 million due to extensive fraud. The FSA must consider its regulatory objectives including reducing financial crime. The most important consideration is a person’s honesty and integrity and his competence and capability. RBG set up a credit system for its customers, which was implemented by the applicant. The applicant was initially a director but then became a non-executive director as he complained about not being involved in decision making. In December, Price Waterhouse (PWC) became suspicious about certain RBG customers in Hong Kong. The company failed and the FBI and SFO became involved. Criminal charges for fraud followed but the applicant was not arrested nor even interviewed. The SFO suspected the applicant but there was insufficient evidence to proceed against him. The FSA, in reaching their decision relied on witness statements from 2 of the directors involved in the frauds. The tribunal gave those documents li�le weight. The applicant gave evidence before the tribunal and claimed there were no signs of fraud. The FSA alleged that he knew about the fraud or, if he didn’t, he should have done. The applicant submi�ed that it is for the applicant to show he is a fit and proper person but the FSA must rely on evidence. Furthermore, it was madness for the applicant to hire PWC if he was a fraudster. A number of glowing testimonials were submitted. The tribunal was to conduct a re-hearing of the evidence. It held that the applicant was a fit and proper person. There was a complete lack of evidence. The tribunal did not criticise the FSA as it has to view 160,000 or so applications and if it held a comprehensive investigation in each and every case, the system would break down.

VAT Tribunal
Domino’s Pizza Group Ltd v The Commissioners of Customs & Excise. Cold dips such as herb & garlic delivered with your pizza or chicken combo or potato wedges are not zero-rated for VAT but are taxable – you have been warned!

Chief Medical Officer Recommends shake up of GMC Fitness to Practice panel
Jeremy Barnett In his report entitled ‘Good Doctors Safer Patients’ dated 14th July 2006, the Chief Medical officer Sir Liam Donaldson made a number of root and branch recommendations as to reform of the Fitness to practise procedures. He found that the GMC has hitherto detected poor performance largely through complaints, dealing mainly with the more severe examples of poor performance, leaving minor issues to be dealt with by employers. He considered continual assessment and found that the majority of the public and doctors believe that regular assessment of competence, technical proficiency and performance should take place. A MORI poll showed that the public wrongly believes that systems are in place to ensure that any doctor they may consult is up to date and competent in their field. It was felt that the present NHS complaints system is too complex and cumbersome. The GMC must introduce systems to track individual practitioners who practice abroad . He concluded that the GMC cannot continue to act as complaint recipient, processor, investigator, prosecutor, judge and jury. There were a number of recommendations including. 1. The civil standard of proof should be adopted in adjudicating concerns about performance, health or conduct. 2. The creation of local GMC affiliates with new powers to ‘record concerns’ 3. New conflict resolution procedures be introduced 4. Patients and their representatives should be given new opportunities to lodge complaints about individuals and services in primary care. 5. Serious cases should be investigated by the GMC but heard by a new independent tribunal with rights of appeal to the High Court. 6. New English Language proficiency assessments be introduced 7. A new medical register be maintained which contains tiers of information ( some publicly available) about each doctor and their standard of practice. 8. The constitution of the GMC should be change to reflect its new responsibilities, by becoming more ‘Board like’ and be accountable to Parliament. The recommendations have received a lukewarm response from both the government and the GMC. Commenting on the proposals, Sir Graham Ca�o, President of the GMC said, ‘These arrangements have not long been introduced and it is not clear to us that the case for further change has been made and that the disruption that would be involved is justified. We would want to look carefully at these proposals. We have considerable concerns, however, about the proposals Sir Liam makes in relation to medical education, which we do not believe would be in patients’ best interests. The public have a right to expect good doctors which means that they must be up to date and fit to practise throughout their working lives. That in turn means that medical education must be linked to our other functions including registration and revalidation. The UK is, rightly, recognised as a world leader in medical education. The case for change has not been made.’

Recent Case Law Jo Murray
R v H [2006] EWCA Crim 1156

Court of Appeal ( Crim Div) 22.5.06 The Appellant Health and Safety Executive appealed against rulings given in a preparatory hearing of an action brought against the Respondent employer for alleged failure to discharge its duty under s. 2(1) Health and Safety at Work Act 1974. The Respondent had provided traffic management services to contractors resurfacing a road. A fatal accident occurred to two of the Respondents employees who moved a tower when fully extended. In a preparatory hearing, the judge ruled that evidence of foreseeability was admissible to show all reasonably practicable steps had been taken by the Respondent, He went on to say that reg. 21 of the Management of Health and Safety at Work Regulations 1999 did not preclude the Respondent from relying upon any act or default of its employees in its defence. The Health and Safety Executive submi�ed that (1) foreseeability played no part in the exercise of determining whether the duty under s. 2 of the 1974 Act had been met, and where foreseeability was an element in any obligation in a health and safety context it was expressly provided for; and (2) the Respondent was precluded from relying on any act or default of either of its employees in order to avoid liability, pursuant to reg. 21 of the Regulations. It was held that: (1) Foreseeabilty was not a means of permi�ing a Defendant to bring concepts of fault appropriate to civil proceedings into the equation by the back door. A Defendant to a charge under ss. 2, 3 or 4 of the 1974 Act, in asking the jury to consider whether it had established that it had done all that was reasonably practicable, could not be prevented from adducing evidence as to the likelihood of the incidence of the relevant risk eventuating in support of its case that it had taken all reasonable means to eliminate it. (2) The Respondent would be entitled to put before the jury evidence to show what had happened was purely the fault of one or both of its employees. If the jury was persuaded that everything had been done by or on behalf of the Respondent to prevent the accident from happening, it would be entitled to be acqui�ed. Appeal dismissed.

Robert Smith

POWYS COUNTY COUNCIL – V- DAVID HALSALL INTERNATIONAL LIMITED APPEAL TO THE HIGH COURT BY WAY OF CASE STATED ON 6TH MARCH 2006 Halsalls were the importers and suppliers of toy gun cap products. There were 2 types of cap, “A” and “B”, which were imported from a reputable company “C” in Taiwan and thereafter supplied by Halsalls to retailers domestically. The products were classified as category 1 fireworks. The manufacturing process was the same for both products, although the the number of cap rings supplied in each pack. Only product A had been tested by C, to British Standards. It was alleged that product B supplied by Halsalls British standards, contrary to Regulation 3(1) of Regulations 1997 and Section 12 of the ConAct 1987, for detonation on ignition testdefects. Halsalls had made in-house ments and trained its in-house statistician shipment, carried cap inside a had been with British all reasonable commission of an The magistrates, found ish Standards, they were the standard compliant tests did not comply with the Fireworks (Safety) sumer Protection ing, and labelling safety policy statepersonnel, engaged an to sample products from each out in-house testing by firing the gun and relied upon the testing which carried out by C in Taiwan did not comply Standards, but contended that they had taken steps and exercised all due diligence to prevent the offence. that although the tests on product B did not conform with Britcomparable and therefore offered the same level of protection as if had been undertaken. product’s packaging differed, as did

The High Court dismissed the appeal holding that the question whether the tests carried out by Halsalls were of a comparable standard and gave members of the public the same protection was a question of fact and degree for the magistrates and that they were entitled to reach the decision they had. Further, as it was an appeal by case stated, the Council could not raise issues which had not been put before the magistrates at first instant. The case demonstrates the importance in producers being able to demonstrate a strong system of safety procedures and checks, in defending any prosecution. Halsalls’ processes plainly impressed the magistrates here at first instance; a decision that the High Court refused to interfere with on appeal. It also demonstrates the importance in the magistrates being asked to recite the correct evidence, when stating a case.


Jeremy Barnett

[The Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment Directive 2002/95/EC] [The Waste Electrical and Electronic Equipment (WEEE) Directive 2002/96/EC] Important new regulations known as the RoHS Regulations which came into force on 1st July 206, make it an offence to “place on the market” a�er 1 July 2006, any new electrical and electronic equipment (EEE) containing more than permi�ed concentrations of lead, cadmium, mercury, hexavalent chromium and polybrominated biphenyl (PBB) and polybrominated diphenyl ether (PBDE), both common flame retardants. These regulations are of widespread importance, as they clearly cover large and small household appliances, IT and telecoms equipment, lighting, tools and toys, leisure and sports equipment. Producers of EEE must be able to demonstrate compliance with the RoHS Regulations by submi�ing within 28 days of a request by the National Weights and Meisures Lab, technical documentation showing compliance and therea�er retaining that documentation for a period of four years from the date on which that product was first placed on the market. Difficulties are already occuring in the market place as to who is bound by the regulations. It is clear that ‘a Producer’ includes those who manufacture, resell, import or export goods. The Regulations apply to electrical equipment which have an electric or magnetic field of 1,000v or 1,500v DC. There are a number of exemptions, which are beyond the scope of this article. Non compliant articles which are stockpiled are not yet on the market, so they must comply prior to release. Manufacturers and importers in many areas are presently considering how to comply with the new obligations contained in the regulations. It is important to note that the Due Diligence defence, common in regulatory breach offences is available ie where it can be shown that all reasonable steps were taken and all due diligence was exercised to avoid commi�ing the offence. The main issue facing IT systems integrators is whether or not they can rely upon compliance by their suppliers. A helpful flow chart is available to assist with navigation through these complicated regulations . it is estimated that six million tonnes of WEEE are processed in Europe every year. The the WEEE Directive encourages and sets criteria for the collection, treatment, recycling and recovery of WEEE and aims to minimise disposal of WEEE at unsorted municipal sites. It makes producers responsible for financing most of these activities (‘producer responsibility’) but also puts onus on distributors and retailers to provide free take back facilities to consumers. On 30th March 2006, the DTI announced that they would consult again on these regulations. It would seem that the earliest that entry into force is unlikely before January 2007. A talk on the new regulations will be given by Jeremy Barnett in chambers further details below.

The New RoHSS and WEE Waste and Electrical Directives
19th October 2006 5pm in Chambers

Jeremy Barnett Presents

Andrew Stubbs Presents

Bad Character
17th October 2006 5pm in Chambers

1 HourCPD

1 HourCPD

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