CPUT refuses to stay PUT

1
CPUT refuses to stay PUT a review of
latest developments.

• FRED PHILPOTT
• JONATHAN GOULDING
• GOUGH SQUARE CHAMBERS

2
The prohibited practices

• There are 5 CPUT prohibited practices
• Contravention of the requirements of professional
  diligence
• Misleading actions
• Misleading omissions
• Aggressive commercial practices
• Automatically unfair practices (schedule1)

3
Key concepts

• Commercial Practice
• Trader
• The Average Consumer
• Transactional Decision
• Professional Diligence

4
Interesting developments as we all become
familiar with them

• Good steer given by some cases from the higher
  courts in 2011/12
• Civil cases
• OFT v. Purely Creative and others 2011 CTLC 45
• Purely Creative .v. OFT 2012 CTLC 40
• Purely Creative Ltd and others ECJ case
  C-428/11
• OFT v. Ashbourne Management Services Limited
  2011 CTLC 237
• Criminal cases
• R (Surrey Trading Standards) v. Scottish and
  Southern Energy 2012 CTLC1

5
OFT v. Purely Creative

• Purposive interpretation
• ..must be construed as far as possible so as
  to implement the purposes and provisions of the
  directive (at para 40)
• Average Consumer - as defined in Reg 2(1)
• reflects the commonsense proposition that
  the UCPD exists to protect from being misled
  consumers who take reasonable care of themselves,
  rather than the ignorant, the careless or the
  overhasty consumer (at para 62)
• Transactional Decision as defined in Reg 2(1)
• any decision with an economic consequence.. (at
  para 68), but is it?
• Causes or likely to cause
• whether, but for the relevant misleading act or
  omissionthe average consumer would have made a
  different decision from that made (para 71)

6
OFT v. Ashbourne MSL

• Early UK case considering professional dligence
• Gym providers standard terms unfair and would be
  expected not to include such unfair terms in
  agreements recommended to consumers.
• In recommending the use of these agreements
  which are unfair and in seeking payment of
  subscriptions under them the defendants have
  not acted in accordance with the standard
  commensurate with honest market practice and have
  caused consumers to take transactional decisions
  they would not otherwise have taken (para 227)

7
The Scottish and Southern Energy Case

• Meaning of Trader and Commercial practice
• SSE PLC was convicted in the Crown Court of 2
  counts of sales agents being trained to use
  misleading sales scripts in doorstep selling of
  energy.
• Appeal dismissed in construing trader
  together with commercial practice the court
  noted the wide definition of both in the
  regulations.

8
Commercial Practice

• Important issue can a one off transaction
  amount to a commercial practice
• R v.Christopher Steele. Snaresbrook Crown Court.
  Judge dismisses case because it fell outside
  scope of commercial practice involved a
  single building contract (April 2012)
• R v X Limited 2013 CTLC 145. A commercial
  practice can be derived from an isolated
  incident, but whether or not it does will depend
  on the facts of the particular case.

9
Recent CJEU cases

• Citroen Belux v Fedaralie voor verzekerings en
  Financiele Tussenpersonen (FvF ) July 2013 Case
  C-265 -12
• A national restriction on combined offers did not
  contravene the maximum harmonisation of a
  domestic measure being more restrictive than the
  UCPD permitted where at least one component of
  the offer was a financial service.

10
Recent CJEU cases

• CHS Tour Services GmbH v. Team4 Travel GmbH Sept
  2013 C-435/11
• There is no automatic infringement of the
  requirements of professional diligence if a
  commercial practice is categorised as a
  misleading commercial practice under Article 6
  UCPD ( misleading actions).

11
Recent CJEU cases

• Trento Sviluppo srl , Centrale Adriatica Soc.
  Coop. arl v Autorita Gurante delia Concorrenza
  e de Mercato Dec 2013 Case C-281/12
• Important transactional decision case.
• The CJEU stated that the concept of
  transactional decision is broadly defined in
  the directive as any decision taken by a
  consumer concerning whether, how and on what
  terms to purchase
• It decided that the concept covered not only the
  decision whether or not to purchase a product,
  but also the decision directly related to that
  decision, in particular the decision to enter
  into the shop.
• The question of whether the decision had to be
  one with economic consequence has been
  answered emphatically with a NO !!

12
Recent CJEU cases

• 4Finance UAB v Valstybiere - April 2014 Case
  C-515/12
• Banned practice schedule 1 para 14 establishing,
  operating or promoting a pyramid promotional
  scheme
• The case decided that pyramid promotional schemes
  constitutes an unfair commercial practice only
  when such a scheme requires the consumer to give
  financial consideration, regardless of its
  amount, for the opportunity to receive
  compensation that is derived primarily from the
  introduction of other consumers into the scheme
  rather than the sale or consumption of products.

13
Civil Redress for CPUT

• Consumer Protection (Amendment ) Regulations 2014
  amends CPUT and new Part 4A gives consumers a
  right to civil redress from 1st October 2014
• Significant development implementing the Law
  Commission recommendations.
• Consumers will have the right to bring a civil
  action against a trader for a commercial practice
  that is
• 1) a misleading action
• 2) aggressive
• Consumers will have a right to damages if they
  incur financial loss or alarm, distress or
  physical inconvenience which would not have been
  incurred in the absence of the prohibited
  practice.

14
TS Activity in CPUT

• Only have to look at TS Today each month to see
  that big cases are being brought to court with
  many instances of systemmic unfair trading
• Fines and penalties can be high
• Confiscation a potentially powerful tool as well
• Recent case of R v Scott King 2014 EWCA Crim
  621 good example of traders breaching CPUT at
  their peril. Trader sold cars and falsely claimed
  that he was acting privately ( Banned paractice
  sched 1 para 22). 58 cars involved. Court of
  Appeal held 109,000 confiscation order
  representing the turnover of the business was not
  disproportionate.