6th January 2022

The Enterprise Act: A political fix

CTSI Lead Officer for Civil Law David Sanders offers his perspective on the efficacy of the Enterprise Act.


By David Sanders
CTSI Lead Officer for Civil Law
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I read with interest the article on the Enterprise Act in the latest Journal of Trading Standards by Ian Bailey. His thoughts of 20 years ago about how this new legislation was meant to work is precisely correct. The Amsterdam Treaty of 1997 changed the Treaty of Rome to allow the contribution consumers make to economic performance to be recognised. “Confident, well-informed consumers could drive markets in their demands for evermore sophisticated products”. The EU introduced a range of Directives in the Consumer Acquis and the Unfair Commercial Practices Directive to deliver the 10 Basic Principles of Consumer Protection. To ensure compliance the EU introduced the Injunctions Directive.

It was an entirely new concept to our service traditionally enforcing the Law, finding offences and prosecuting the offender. On top this centuries-old system was a new civil system designed to empower consumers to take on the marketplace in confidence. Where any breach of trading legislation was discovered, it was to be stopped, and any loss compensated for. It did not criminalise any breach. But it was intended to act fast.

What made the change so radical is that the “White Paper” introducing the UK to this new approach, Modern Markets-Confident Consumers, identified Trading Standards as “Confident Consumers”. The criminal system of level-playing-field enforcement depended on inspections, attempting to make the marketplace a safe place for the consumer. The new system, although demanding market surveillance, depended on training the consumer to handle the market place. Education is fundamental. Neither Local nor Central Government have ever recognised the implications of this.

Unfortunately, the more significant part of the Amsterdam Treaty called for Member States to surrender even more of their Sovereignty to the EU. This enhanced anti-EU sentiment in some quarters. It led eventually to Brexit but not before the mechanisms created (Consumer Voice, Consumer Direct) to support confident consumer and with them our source of intelligence, were destroyed.

But the Directives are still relevant. The Injunctions Directive (revamped three times since its inception, the last time being since Brexit.) remains very important to Trading Standards. It is only through Civil Process that this Service can apply the full protections of the Consumer Credit Act.

We must make this system work!

This year CTSI are debating with its membership the way forward.  I am pleased to see that once again CTSI is recognising the importance of consumers and our service to consumers.  We are still arguing for greater financial resources. Why should we do this when the very tools we have been given to help consumers are defective. What would we tell consumers if they had bought goods or services that were this bad?  They are over complicated and the whole delivery system is, at present, not fit for purpose. That is to say, the Legislature, Local Authority legal services and the Courts as well as TSO training. When you have new powers, you should engage all parties in their application. You do not go blindly into action as it costs money, valuable resources we don’t have. Reputational damage is worst of all and takes years to rebuild.

I was Lead Officer for Civil Law when the Injunctions Directive was proposed. Being a serving TSO at that time I was aware that under the level playing field system, if we felt at any time we were obstructed or needed to search premises more thoroughly we headed straight to the local Magistrates Court and obtained a search warrant, then went back and executed it with or without the aid of the Police. We have a right of audience in a Magistrates Court.

The new Injunctive powers seemed even better in some respects. Mock auctions could be stopped before they ever took place. Rogue traders could be stopped straightaway. The evidential burden in civil law is quite a bit lower and with an injunction served; the defendant has to show the Court he didn’t, rather than us proving that he did. But we don’t have a right of audience in a Civil Court

On behalf of CTSI I spoke to Courts and lawyers and found that we were not going to get access until we proved competence. This is good, but training was only then provided by two organisations and would prove expensive.  So, at the first hurdle we were defeated.  We could not look in the local paper; read an advertisement for a sale in a local hotel by a known trader and go down the County Court, request an Injunction to stop it. But this was exactly the flavour of the thinking behind “Confident Consumer”

Now CAB and Which? will advise Consumers on their rights when suffering detriment.  But they can only advise.  It’s then up to the Consumer. We used to hold their hand.  Even organisations with no power will lose credibility when they advise a course of action that doesn’t serve its purpose.

Why should we make this system work?

Just one example based on Iain Bailey’s case study. Rogue Traders. The legal pursuit of “Zero Carbon” affects all 68 million of us in the UK. We are all consumers. We will make decisions costing £thousands to insulate our homes, change our mode of transport and make other life style decisions, and often use finance to do so. There are insufficient experts to advise us and to carry out vital work.  Our Councils aren’t geared up to this yet. But every department will be affected (Education, certainly Trading Standards, Housing, Environment) and unless we do our part any extra revenues will go to Housing and Social Services.

So, when reviewing our policies and focusing again on consumers, as I think we should, CTSI should review the effectiveness of our powers. If you are an army and get ambushed whilst out of ammunition, you’re in trouble. But if you attack first, you should review your capability.

We know what’s coming, so why not prepare to tackle it? Could CTSI investigate how effective the powers given to us by Parliament are in practice just as Iain has done. The Institute needs to make a real fuss until the system is rectified. If we are “Confident-Consumer”, we are an up-front service engaging with the consumer in advance of their purchase decisions. We are not like a fire extinguisher, to only be used when things go badly wrong.  But even as a fire extinguisher, as we are treated in some quarters, it is essential that we work!

In my career I was twice involved in a major Foot and Mouth outbreak. This Service coped magnificently.  We are now in a much more difficult position, politically, than we were, certainly in 1969, and the processes we need are more complex as several other organisations must be on board with shared aims. Local Authority services cannot do this and why should they all re-invent the wheel. CTSI could show its leadership by employing its best efforts to highlight powers that cannot be used effectively and identifying the fault.  It may be the legislation, availability of the Courts or the Local Authority itself not being able to deliver the legal support.

The Enterprise Act took years to reach the Statute Book, and our powers were only squeezed in there as the only vehicle available at the time. We might consider a fresh start most appropriate and lobby for that. We might push for a Competition and Consumers Act with full civil and criminal powers to deal appropriately with every trading situation that affects consumers, including redress.  We might consider lobbying for the reintroduction of those vital consumer protection mechanisms so callously discarded under the Consumer Landscape Review.

We should do this not for our own sake but because consumer protection has been diminished.  Consumers that protection now more than ever, and available locally. Perhaps if we don’t, we may not be needed, certainly in our present form, ever again.

The experience gained by Kingston Borough Council should ring alarm bells. It should not put us off using the system but the learning process should enable our Institute to demand improvements so that we can continue to fight above our weight well into the future.

3 responses to “The Enterprise Act: A political fix”

  1. Geoff Price FCTSI says:

    Excellent article, we are very fortunate to have David taking on this issue. It clearly sets out a roadmap we should follow.

  2. Gerry Dutton says:

    Good article, David. As with many others, highlights the lack of resources and the ever increasing legal hurdles which lead to the battles to get outcomes such as the one highlighted by Kingston.

  3. Martin Fisher says:

    One of the potential legal hurdles, a big one, that David hasn’t mentioned is that of costs. Civil costs follow a different path to criminal ones. Lose the case in its entirety and your authority is liable for ALL defence costs. There is no such thing in civil cases as Costs from Central Funds, or whatever they are called today, however justifiable the bringing and conduct of the TS case was.

    Even if you get some sort of win you can still end up paying out – If I recall correctly this happened to Devon TS some years ago.

    It depends how many separate legal issues get argued about and ruled on in the case. Each argument generates its own bill of costs. So if you lose a few complex points after long and learned arguments in court, this can mean you get little if any of your own costs back.

    In my one experience of a civil case under the Enterprise Act, all this did make our lawyers very nervous. We got our initial order against a park home operator, but arguably fully justified action for breach never got taken.

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