- •Commercial Law
- •Contents
- •Preface
- •Abbreviations
- •Table of Statutory Provisions
- •Table of Cases
- •1 Introduction
- •1 Introduction
- •2 What is agency?
- •3 Nature and characteristics of agency
- •4 The different types of agency
- •5 Conclusion
- •6 Recommended reading
- •1 Introduction
- •2 The authority of an agent
- •3 Agency by ratification
- •4 Agency of necessity
- •5 Conclusion
- •6 Recommended reading
- •1 Introduction
- •2 Duties of an agent
- •3 Rights of an agent
- •4 Commercial agents and principals
- •5 Disclosed agency
- •6 Undisclosed agency
- •7 Termination of agency
- •8 Recommended reading
- •Introduction
- •1 Introduction
- •2 Background
- •3 Development of the sale of goods
- •4 Equality of bargaining power: non-consumers and consumers
- •5 Impact of the European Union
- •6 Contract of sale
- •7 Contracts for non-monetary consideration
- •8 Contracts for the transfer of property or possession
- •9 Recommended reading
- •1 Introduction
- •2 Background
- •3 Sale of Goods Act 1979, section 12: the right to sell
- •4 Sale of Goods Act 1979, section 13: compliance with description
- •5 Sale of Goods Act 1979, section 14(2): satisfactory quality
- •6 Sale of Goods Act 1979, section 14(3): fitness for purpose
- •7 Sale of Goods Act 1979, section 15: sale by sample
- •8 Exclusion and limitation of liability
- •9 Acceptance
- •10 Remedies
- •11 Recommended reading
- •1 Introduction
- •2 Background to the passage of property and risk
- •3 Rules governing the passage of property
- •4 Passage of risk
- •5 The nemo dat exceptions
- •6 Delivery and payment
- •7 Remedies
- •8 Recommended reading
- •1 Introduction
- •2 Background
- •3 Provision of Services Regulations 2009
- •4 Supply of Goods and Services Act 1982
- •5 Recommended reading
- •1 Introduction
- •2 Background
- •3 Electronic Commerce (EC Directive) Regulations 2002
- •4 Distance selling
- •5 Recommended reading
- •Introduction
- •1 Introduction
- •2 CIF contracts
- •3 FOB contracts
- •4 Ex Works
- •5 FAS contracts
- •6 Conclusion
- •7 Recommended reading
- •1 Introduction and background
- •2 Structure and scope
- •3 UNIDROIT Principles of International Commercial Contracts
- •4 Conclusion
- •5 Recommended reading
- •1 Introduction and background
- •2 Open account
- •3 Bills of exchange
- •4 Documentary collections
- •5 Introduction to letters of credit
- •6 Factoring
- •7 Forfaiting
- •8 Conclusion
- •9 Recommended reading
- •1 Introduction
- •2 Hague and Hague-Visby Rules
- •3 Charterparties
- •4 Time charterparty
- •5 Common law obligations of the shipper
- •6 Common law obligations of the carrier
- •7 Bills of lading
- •8 Electronic bills of lading
- •9 Conclusion
- •10 Recommended reading
- •Introduction
- •1 Introduction
- •2 Background
- •3 Development of negligence
- •4 The move to strict liability
- •5 Types of defect
- •6 Developments in strict liability
- •7 Recommended reading
- •1 Introduction
- •2 Personnel
- •3 Meaning of ‘product’
- •4 Defectiveness
- •5 Defences
- •6 Contributory negligence
- •7 Recoverable damage
- •8 Limitations on liability
- •9 Recommended reading
- •Introduction
- •1 Introduction
- •2 Background
- •3 Enforcement strategy
- •4 Criminal law controls
- •5 Civil law enforcement
- •6 Recommended reading
- •1 Introduction
- •2 Scope of the 2008 Regulations
- •3 Prohibition against unfair commercial practices
- •4 Codes of practice
- •5 Misleading actions
- •6 Misleading omissions
- •7 Aggressive commercial practices
- •8 Commercial practices which are automatically unfair
- •9 Offences
- •10 Recommended reading
- •1 Introduction
- •2 Background
- •3 Controls over misleading advertising
- •4 Comparative advertising
- •5 Promotion of misleading or comparative advertising
- •6 Recommended reading
- •1 Introduction
- •1 Introduction
- •2 History of banking regulation: early policy initiatives
- •3 New Labour and a new policy
- •4 The Financial Services Authority
- •5 The Coalition government
- •6 Conclusion
- •7 Recommended reading
- •1 Introduction
- •2 What is a bank?
- •3 What is a customer?
- •4 Bank accounts
- •5 Cheques
- •6 Payment cards
- •7 Banker’s duty of confidentiality
- •8 Banking Conduct Regime
- •9 Payment Services Regulations 2009
- •10 Conclusion
- •11 Recommended reading
- •1 Introduction
- •2 European banking regulation
- •3 The Financial Services Authority
- •4 Financial Services Compensation Scheme
- •5 Financial Ombudsman Scheme
- •6 Financial Services and Markets Tribunal
- •7 The Bank of England
- •8 Bank insolvency
- •9 Illicit finance
- •10 Conclusion
- •11 Recommended reading
- •1 Introduction
- •1 Introduction
- •2 Evolution of the consumer credit market
- •3 Consumer debt, financial exclusion and over-indebtedness
- •4 Irresponsible lending
- •5 Regulation of irresponsible lending
- •6 Irresponsible borrowing
- •7 Ineffective legislative protection for consumers
- •8 A change of policy
- •9 Lessons from the United States
- •10 Conclusion
- •11 Recommended reading
- •1 Introduction
- •2 Crowther Committee on Consumer Credit
- •3 Consumer Credit Act 1974
- •4 Formalities
- •5 Cancellation of agreements
- •7 Documentation of credit and hire agreements
- •8 Matters arising during the currency of credit or hire agreements
- •9 Credit advertising
- •10 Credit licensing
- •11 Unfairness test
- •12 Other powers of the court
- •13 Financial Ombudsman Service
- •14 Enforcement
- •15 Consumer Credit Directive
- •16 Conclusion
- •17 Recommended reading
- •Bibliography
- •Index
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Policy on unfair commercial practices |
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due diligence defence and the defence of ‘innocent publication’. The section |
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concludes by looking at the liability of ‘another person’ for offences against the |
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Regulations. |
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Section 5 considers the role of civil law enforcement as a means of promot- |
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ing compliance. The first part of the section looks at civil enforcement under |
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the Consumer Protection from Unfair Trading Regulations 2008, including |
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enforcement orders and interim enforcement orders and undertakings. The |
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section goes on to consider civil enforcement under the Business Protection |
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from Misleading Marketing Regulations 2008, including injunctions and |
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undertakings. |
2â Background
For centuries, the state has had a role to play in the regulation of the trading environment in which sellers and buyers transact their business. As far back as the Assize of Cake and Ale in 1266, controls existed to regulate the quality of food and drink.3 Likewise, criminal controls over weights and measures have been on the statute books for many centuries. Purchasers, whether traders or consumers, need to be assured that, when buying goods by weight, length or volume, they will receive the true quantity for which they have paid. Equally, purchasers must know that goods and services will be as described and advertised and that they will not be subjected to misleading or fraudulent claims about the products. Such basic regulatory controls encourage confidence in the market and create a stable trading environment in which business can flourish.
While some fundamental controls have existed for many centuries, the period since the 1960s has seen a marked upsurge in criminal trading law. The role of the state in these developments has been crucial since, as a regulator enforcing criminal legislation, it establishes the minimum standards of behaviour that will be tolerated without penalty. This helps to promote a stable trading environment in which both seller and buyer can have confidence when transacting business, whether on a commercial basis or as a consumer. The use of criminal regulation as opposed to civil law remedies is valuable from a chronological perspective, as compliance with the criminal framework should prevent problems arising while civil law remedies deal with the aftermath of an event when damage has already occurred.
The legislative developments of the last sixty years have emanated partly from Westminster and, since the United Kingdom’s accession to the EC Treaty, partly from Europe. Thus, for example, the Consumer Protection Acts 1961– 71, which dealt with product safety, originated in the United Kingdom. By contrast, however, current product safety legislation is to be found primarily (but
3The quality of food is now governed by the Food Safety Act 1990, which lies beyond the remit of this text.
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2â Background |
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not exclusively)4 in the General Product Safety Regulations 2005,5 which give |
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effect to a European Directive.6 Other major UK legislation since the 1960s has |
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included the Trade Descriptions Act 1968 and pricing controls,7 although these |
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have also largely been overtaken by a European Directive. However, the ambit |
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of controls in the past went far wider than this and included matters as diverse |
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as unsolicited goods,8 pyramid selling, bargain offers, outlawing attempts to |
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deprive consumers of their legal rights9 and preventing traders from concealing |
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their commercial status.10 |
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This wealth of legislation, while far-reaching, developed in a very piecemeal |
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fashion. It is significant, therefore, that the passage of the Consumer Protection |
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from Unfair Trading Regulations 2008, which adopt the Unfair Commercial |
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Practices Directive 2005/29/EC, has swept away the existing multiplicity of |
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tightly drafted specific offences and replaced them with a few holistic provisions |
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that, arguably, speak rather more to the spirit of the law than the precise letter of |
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it.11 In total, twenty-two pieces of legislation were either repealed or amended to |
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make way for the requirements of the Directive, some of the main amendments |
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involving the repeal of the major offences in the Trade Descriptions Act 196812 |
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and Part III of the Consumer Protection Act 1987, which dealt with misleading |
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prices. The Control of Misleading Advertisements Regulations 198813 were also |
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repealed. While the majority of the repealed provisions have been replaced and |
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often enhanced for consumer buyers by the Consumer Protection from Unfair |
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Trading Regulations 2008, the wholesale repeal and amendment of so many |
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provisions impacted negatively on business-to-business transactions. This |
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necessitated the passage of the Business Protection from Misleading Marketing |
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Regulations 2008 to protect business purchasers and to ensure continued com- |
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pliance with the Misleading and Comparative Advertising Directive.14 The |
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detailed provisions of both sets of new Regulations will be analysed in the fol- |
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lowing two chapters. |
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4 |
There are some residual controls based upon Part 2 of the Consumer Protection Act 1987 but the |
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General Product Safety Regulations 2005, SI 2005/1803 are the primary legislation in this area. A |
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detailed analysis of the controls over product safety fall outside the remit of this text. |
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5 |
SI 2005/1803. |
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6 |
Directive 2001/95/EC of 3 December 2001 on general product safety. |
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Initially in the Trade Descriptions Act 1968, s.11 and then in the Consumer Protection Act 1987, |
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Part II. |
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8 |
Unsolicited Goods and Services Act 1971. |
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9 |
Consumer Transactions (Restrictions on Statements) Order 1976, SI 1976/1813. |
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10 |
Business Advertisements (Disclosure) Order 1977, SI 1977/1918. |
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11 |
See M. Griffiths, ‘Unfair commercial practices: a new regime’ (2007) 12 Communications Law |
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194. |
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12 |
Trade Descriptions Act 1968, s. 1, which dealt with the application of false trade descriptions |
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to goods and the supply or offer to supply goods to which a false trade description of goods had |
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been applied, and s. 14 which dealt with the application of false trade descriptions to services, |
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accommodation or facilities. |
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13 |
SI 1988/915. |
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Directive 84/450/EC, now codified in Directive 2006/114/EC. The Business Protection from |
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Misleading Marketing (BPMM) Regulations 2008 are discussed in detail in the Part 5 Chapter 3. |
338 |
Policy on unfair commercial practices |
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The new Regulations encompass many of the malpractices regulated by |
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the previous regime. It follows that, in some instances, existing case law may |
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still be relevant, while in respect of the newer areas, such as the prohibition |
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on aggressive behaviour in the Consumer Protection from Unfair Trading |
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Regulations 2008, a new body of case law will have to develop over the com- |
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ing years. |
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Q1 Consider the need for legislation to protect both business purchasers and |
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consumer buyers in order to promote a sound trading framework. |
3â Enforcement strategy
Article 13 of the Unfair Commercial Practices Directive15 requires that Member States must introduce penalties that are ‘effective, proportionate and dissuasive’ for breaches of national legislation used to adopt the provisions of the Directive.16 Further, Member States must take all the necessary measures to ensure that these penalties are enforced.
As with many areas of law, an effective enforcement machinery, whether via criminal offences or civil law remedies, is crucial to success. Traditionally, the primary focus for enforcement authorities in this area has been on criminal law enforcement, including, of course, the pursuit of criminal prosecutions. There will always be situations when prosecution for a criminal offence will be the most appropriate enforcement tool because, for example, of the severity of the conduct concerned and the risks that it poses to purchasers. Alternatively, it may be appropriate if the trader concerned refuses to provide an undertaking or comply with enforcement orders or refrain from the offending conduct. However, enforcement authorities might reasonably argue that resort to a criminal prosecution, while eminently justifiable in respect of rogues, fraudsters and persistent offenders, might be considered too heavy-handed when used against a genuine trader who, perhaps through carelessness rather then intent, has committed a strict liability offence. In such circumstances, a better option would be to use civil law approaches, such as the giving of undertakings by a trader not to offend in the future.
When exercising their enforcement powers under both sets of regulations, enforcement authorities must ‘have regard to the desirability of encouraging [compliance] … by such established means as it considers appropriate having regard to all the circumstances of the particular case’.17 Thus, it is clear that the paramount policy behind enforcement is to promote and ensure compliance with the Regulations rather than simply to punish transgressors.
15 Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market (‘Unfair Commercial Practices Directive’).
16 In the United Kingdom, the Consumer Protection from Unfair Trading (CPUT) Regulations 2008.
17 CPUT Regulations 2008 reg. 19(4) and the BPMM Regulations 2008 reg. 13(4).