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REGULATIONS 2008 (“the Regulations”)
The Regulations came into force on 26 May 2008. They                 Generally speaking, in order to constitute a breach of the
consolidate a substantial amount of the existing consumer            Regulations (except in the case of Unfair Commercial
protection legislation and create new offences relating to           Practices – see below), the relevant conduct must cause
trade descriptions, pricing and advertising. The Regulations         or be likely to cause the average consumer to take a
also implement the EU Directive on Unfair Trading and                transactional decision he would not have taken otherwise.
apply to almost all businesses (defined by reference to a
“trader” but including all trades, crafts and professions) that      Misleading actions
deal directly with consumers.
                                                                     There are 3 ways in which a commercial practice can
The key new concept is the “commercial practice”, which              become a misleading action as follows: -
includes any act, omission, course of conduct, representation
or commercial communication (including advertising and               False information
marketing) directly connected with the promotion, sale
or supply of a product to or from consumers, whether                 The commercial practice contains false information that
occurring before, during or after a commercial transaction (if       deceives or is likely to deceive the average consumer
any) in relation to a product.                                       in respect of any of 11 separate matters, even if the
                                                                     information is factually correct. Those matters include the
“Product” is not limited to goods but means “…any goods              “main characteristics of the product” (defined by a non-
or services and includes immovable property, rights and              exhaustive list of 18 separate examples) and “the nature,
obligations”.                                                        attributes and rights of the trader” (another non-exhaustive
                                                                     list of 8 examples).
The stated aim of the Regulations is to prohibit all commercial
practices which are misleading, aggressive or unfair. There          Marketing
are 2 methods by which that prohibition can be enforced.
                                                                     The commercial practice concerns the marketing of a
The first method is prosecution in the criminal courts               product (including comparative advertising) which creates
(Magistrates’ Court and Crown Court).                                confusion with any products, trade marks, trade names or
                                                                     other distinguishing marks of a competitor.
The second method is by way of an application to the civil
Courts (High Court or County Court) for an enforcement               Code of practice
order under Part 8 Enterprise Act 2002. The Court can
make an order prohibiting the respondent from breaching              The commercial practice concerns a failure by the trader
the provisions of the Regulations. Any breach of that                to comply with a commitment contained in a code of
order can be punished by contempt proceedings, in respect            practice with which the trader has undertaken to comply,
of which the Court can impose a fine and/or a prison                 but only if the trader indicates as part of the commercial
sentence.                                                            practice that he is bound by that code of conduct and the
                                                                     commitment is firm and capable of being verified and is not
                                                                     merely aspirational.        9400 Garsington Road, Oxford Business Park, Oxford OX4 2HN   Tel: +44 (0)1865 722106 Fax: +44 (0)1865 201012
                       Aldwych House, 81 Aldwych, London WC2B 4RP                   Tel: +44 (0)20 7404 4433 Fax: +44 (0)20 7430 1133
                       Davidson House, Forbury Square, Reading RG1 3EU              Tel: +44 (0)118 982 2640 Fax: +44 (0)118 900 1831

Misleading omissions                                                           limited time;

A commercial practice becomes a misleading omission if, in                •	 making persistent and unwanted solicitations by
its factual context, it omits or hides “material information”,               telephone fax, email or other remote media except in
provides material in a manner which is unclear or unintelligible,            circumstances and to the extent justified to enforce a
ambiguous or untimely or fails to identify its commercial                    contractual obligation;
intent, unless this is already apparent from the context.
                                                                          •	 “bait advertising” scams that advertise a product as a
“Material information” is information which the average                      special offer without having it in stock or only having
consumer needs, according to the context, to take a                          a token stock.
transactional decision and any information requirement
which applies in relation to a commercial communication as a              Code owners
result of a Community obligation. This might be information
required by Distance Selling Regulations, for example.                    It is an offence for a code owner to promote any unfair
                                                                          commercial practice in a code of conduct. A “code
If the commercial practice is an invitation to purchase, then             owner” means any trader or body responsible for the
the definition of material information (if it is not already              formulation or revision of a code of conduct or responsible
apparent) will also include the “main characteristics of the              for monitoring compliance with the code by those who
product” (see under False Information above), identity and                have undertaken to be bound by it.
address of the trader, price (including taxes) or the way in
which it is calculated, freight and postal charges, arrangements          One example of a code owner would be the Federation of
for payment delivery performance, handling and the existence              Master Builders, which publishes its own code of practice
of rights to withdraw or cancel.                                          with which its members are obliged to comply and upon
                                                                          which consumer are encouraged to rely when dealing with
Aggressive commercial practices                                           that federation’s members.

A commercial practice is aggressive if, in its factual context,           Professional Diligence
it significantly impairs the average consumer’s freedom of
choice or conduct in relation to the product concerned                    A trader will commit an offence if he knowingly or recklessly
through the use of harassment, coercion or undue influence                engages in a commercial practice which contravenes the
and it causes or is likely to cause him to take a transaction             requirements of “professional diligence” and that practice
decision that he would not otherwise have taken. The                      materially distorts or is likely to materially distort the
Regulations give a further non-exhaustive list of criteria which          economic behaviour of the average consumer with regard
the Court shall take into account in determining whether                  to the product.
harassment, coercion or undue influence has been used.
                                                                          “Professional diligence” means the standard of special skill
Unfair Commercial Practices                                               and care which a trader may reasonably be expected to
                                                                          exercise towards consumers which is commensurate with
A Schedule to the Regulations lists 31 specific commercial                either honest market practice in the trader’s field of activity,
practices which are in all circumstances considered unfair.               or the general principle of good faith in the trader’s field
There is no requirement to show that the relevant practice                of activity.
did or might have affected an average’s consumer’s conduct.
The Schedule seeks to cover a very wide range of situations               This offence could be committed by cosmetic dentists or
including, for example:                                                   opticians for example, when recommending a particular
                                                                          product in preference to another.
•	 including in advertising to children direct exhortations
   to buy;                                                                Commentary and key points for in-house lawyers

•	 falsely claiming the endorsement of a public or private                Many key definitions are drafted in very broad terms and
   body;                                                                  refer to non-exhaustive lists of examples. It follows that
                                                                          other conduct or characteristics, which are not immediately
•	 making inaccurate claims about the risk to a consumer’s                obvious, could still be caught within the relevant definition.
   personal safety if the consumer does not purchase the                  This could make it difficult to determine where the
   product;                                                               boundaries lie, particularly because earlier trading law
                                                                          authorities will not always be easily applied to the new
•	 falsely stating that goods will only be available for a             9400 Garsington Road, Oxford Business Park, Oxford OX4 2HN   Tel: +44 (0)1865 722106 Fax: +44 (0)1865 201012
                            Aldwych House, 81 Aldwych, London WC2B 4RP                   Tel: +44 (0)20 7404 4433 Fax: +44 (0)20 7430 1133
                            Davidson House, Forbury Square, Reading RG1 3EU              Tel: +44 (0)118 982 2640 Fax: +44 (0)118 900 1831

law.                                                                      or promotions, brochure sign-off and instructions to
The prosecution in a criminal case will need to prove that                external marketing consultants, for example. The business
case beyond all reasonable doubt by reference to the                      might need to retrieve data relatively quickly as part of
evidence.                                                                 a potential defence, especially if the key decision makers
                                                                          have subsequently the left the business. There is a 3 year
On an application for an enforcement order, the applicant                 limitation period, which can be shortened to 1 year following
only needs to prove its case on the balance of probabilities.             the date of “discovery of the offence by the prosecutor”.
The respondent can avoid being the subject of an order
by giving binding undertakings not to repeat the prohibited               A separate defence is available to advertisers who can
conduct. Where an order is made, the consequences of                      prove that they did not know and had no reason to suspect
breaching the order can be contempt of court proceedings,                 that publication would amount to an offence under the
which can ultimately result in a fine, imprisonment, or                   Regulations.
The lower standard of proof suggests that most Trading
Standards teams will look to bring applications for                       The “likely to cause” provisions emphasise that a consumer
enforcement orders, where possible and will reserve                       would not need to complain or make any purchase before
prosecution only for the most serious cases. These                        Trading Standards could investigate, prosecute an offence
applications will also represent less of an administrative                or make an application for an enforcement order. This
burden, because there is no need to conduct an interview                  might give rise to “tactical” reporting of potential offences
under caution with the potential respondent before making                 by competitors (or opponents in litigation) in some cases.
an application.
Wiltshire County Council recently obtained the first
enforcement order under the Regulations against a firm of                 In common with most other regulatory offences any
general handymen in Salisbury County Court. The OFT has                   director, manager, secretary or other corporate officer
reported the case on its website.                                         can be prosecuted as well as, or instead of, the company.
                                                                          Penalties upon conviction can be an unlimited fine and up
                                                                          to 2 years imprisonment.
Sales and marketing
Sales directors and marketing teams in particular need to
take notice of these Regulations. The Regulations will apply              You might want to consider:
to almost any business that directly promotes and/ or sells               •	 reviewing your practices and procedures, especially of
any product or service to consumers. A business could                        sales and advertising teams.
be investigated or prosecuted even in the absence of any                  •	 updating training for relevant teams and directors, and
consumer complaint. The use of non-exhaustive criteria                       keeping records that this has been done.
for determining whether an offence has been committed                     •	 reviewing procedures relating to any trade code of
and the broad drafting style suggests that the intention is                  practice for which you are responsible, with which you
to bring a broad range of conduct within the reach of the                    must comply, or with which you claim to comply.
Regulations. Some offences under the Regulations can be                   •	 reviewing general and specific document retention
committed even where information is factually correct (see                   policies, with particular regard to the requirement to
the “misleading actions” offences).                                          prove due diligence defences.
                                                                          •	 consultation and collaboration with local trading
Recording information                                                        standards officers.

There are statutory defences available to some of the                     For further information please get in touch with your usual
offences, but where they are available, it is for a defendant             Manches contact or:
to prove by evidence that it exercised all due diligence to
avoid the commission of an offence AND that the offence                                        Piers Clayden in Oxford on
was due to a mistake, reliance on information supplied by                                        +(44) (0)1865 813606
another person, act or default of another person, accident,                              or by email
or another cause beyond that defendant’s control.
                                                                          This briefing note is intended merely to provide a summary of the
                                                                          law in this area and is not a comprehensive guide. It is not intended
This might affect the type and amount of data that the                    to provide legal advice for specific cases. The law and practice in this
business wishes to retain in respect of decisions on pricing              note is stated as at July 2009.             9400 Garsington Road, Oxford Business Park, Oxford OX4 2HN    Tel: +44 (0)1865 722106 Fax: +44 (0)1865 201012
                            Aldwych House, 81 Aldwych, London WC2B 4RP                    Tel: +44 (0)20 7404 4433 Fax: +44 (0)20 7430 1133
                            Davidson House, Forbury Square, Reading RG1 3EU               Tel: +44 (0)118 982 2640 Fax: +44 (0)118 900 1831