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The Trade Descriptions Act 1968 is Dead: Long Live The Consumer Protection from Unfair Trading Regulations 2008.

A look at the new provisions and how the appeal courts are likely to interpret them based on their decisions in relation to previous legislation. First published in the Justice of the Peace (2008) 172 JPN 516, 536 and 560. Note the new postscript on commercial practices containing false information.

The Consumer Protection from Unfair Trading Regulations 2008 ("CPUTR"), which came into force on 26th May 2008, seek to implement, within the law of the United Kingdom, the requirements of the Unfair Commercial Practices Directive 2005/29/EC ("UCPD").  The scope of the CPUTR is largely apparent from the legislation which it repeals and, in effect, replaces.  Most notably, the CPUTR substantially repeals that champion of consumer protection, the Trade Descriptions Act 1968 ("TDA").  The TDA had itself derived from successive manifestations of the Merchandise Marks Act which was first enacted in 1862 as "an Act to amend the law relating to the fraudulent marketing of merchandise".  Over its 40 year reign the TDA, or at least its basic principles, became well known to traders and the public alike, even if often erroneously referred to as the "Trades Description Act", and it will be a long time before its European spawned equivalent gains such notoriety.  Some provisions of the TDA, notably the enforcement provisions in ss 27-30, remain in force so that they can continue to be utilised by the Copyright Designs and Patents Act 1988, the Clean Air Act 1993 and the Video Recordings Act 1984.  The Olympic Symbol etc (Protection) Act 1995 was amended by the relatively recent London Olympic Games and Paralympic Games Act 2006 to make the enforcement provisions in ss 27-29 of the TDA applicable to that 1995 Act.  Other provisions of the TDA, parts of ss 5, 19 and 24, although repealed, have been saved in so far as they are referred to by, for example, the Hallmarking Act 1973 and the Crystal Glass (Descriptions) Regulations 1973.

The second most significant repeal and replacement by the CPUTR is ss 20-26 of the Consumer Protection Act 1987 ("CPA") which legislated against misleading price indications.  That task had originally been ably dealt with by s 11 of the TDA.  One effect of the CPUTR, therefore, is to reunite the legislation dealing with false or misleading price indications with the legislation dealing with other false or misleading descriptions of goods or services.  The CPUTR makes numerous other repeals and amendments to avoid a duplication of laws and the possibility of the new law exceeding the controls permitted by the UCPD.

The UCPD

The UCPD, in its preamble, indicates that it "approximates the laws of the Member States on unfair commercial practices, including unfair advertising, which directly harm consumers' economic interests and thereby indirectly harm the economic interests of legitimate competitors."  The UCPD is therefore concerned not only with fairness for consumers but, indirectly, with fair competition for traders.  "Harmonisation", it says, "will considerably increase legal certainty for both consumers and business.  Both consumers and business will be able to rely on a single regulatory framework based on clearly defined legal concepts regulating all aspects of unfair commercial practices across the EU".  It remains to be seen whether the new legal concepts originating in the UCPD are indeed clearly defined or whether they will require a good deal of judicial interpretation before such clarity is achieved.

The CPUTR and unfairness

In exploring the effect of the CPUTR it is worthwhile noting some of the peculiarities in its drafting.  Given that the CPUTR are the direct offspring of the UCPD it is unfortunate, although of little import, that the mother refers to "unfair commercial practices" whereas the child refers to "unfair trading" and the "CP" in the acronym (or initialism) of the mother stands for "Commercial Practices" whereas, in the case of the child, it stands for "Consumer Protection".  The Department for Business Enterprise and Regulatory Reform ("BERR"), having given the CPUTR their cumbersome name, unconventionally refers to them in their government publications as the "CPRs".  This pluralisation, incorrectly makes it sound as though more than one set of regulations are being referred to but does avoid the phonetic similarity between "CPUT" and "KAPUT" Regulations.  There are in fact other regulations which might benefit from a truncated initialisation and which might also be known as "CPRs", these include the Consumer Protection (Cancellation of Contracts Concluded away from Business Premises) Regulations 1987.  The Criminal Procedure Rules and the Civil Procedure Rules either separately or together could more accurately be described as the "CPRs". [As from 5th October 2015 the Criminal Procedure Rules has provided that "a reference to the Criminal Procedure Rules may be abbreviated to 'CrimPR'."]

The UCPD, as its name implies, is all about "unfair commercial practices" which it requires Member States of the European Union to legislate against.  Article 11 provides for such legislation to give a remedy to individuals or organisations and/or an administrative authority.  The main scheme of the CPUTR is very much a criminal one and the BERR has made it clear, in its "Government Response to the consultation on draft Consumer Protection from Unfair Trading Regulations" of February 2008, that the CPUTR does not include a private law right to seek redress.  "The Government", it says, rather enigmatically, "remains concerned that adopting a general private right of action for the Regulations as a whole might have unintended consequences."  Civil enforcement of the CPUTR is, therefore, intended to be restricted to action taken under Part 8 of the Enterprise Act 2002 ("EA") which, by reg 26, added the UCPD to the list of Directives providing for "community infringement" in Schedule 13 of the EA.  S 212(1) of the EA includes as a "community infringement" "an act or omission which harms the collective interests of consumers and which … contravenes a listed Directive as given effect by the laws, regulations or administrative provisions of an EEA State."

Part 1 of the CPUTR, immediately after the citation and interpretation provisions, launches straight into defining what are "unfair commercial practices" and are hence "prohibited" (see reg 3).  It is not until Part 3 of the CPUTR that any mention is made of "offences" rather than "prohibitions".  Strangely, having defined an "unfair commercial practice", in terms following its meaning in the UCPD, Part 3 does not simply make it an offence, as it might have done (subject to, for example, the addition of the "knowingly or recklessly" mens rea provision in reg 8), for a trader to engage in a commercial practice in breach of the reg 3 prohibitions.

By providing independently for those commercial practices which are "prohibited" and those which constitute criminal "offences" the CPUTR may, despite the BERR's protestations to the contrary, have set up a civil regime enabling or at least aiding individual consumers, who have prohibited commercial practices perpetrated against them, to sue for damages in the civil courts.  In Valentine v Silk (CH 1998 V5333), it was emphatically held, by Jonathan Parker J, that it was "quite unarguable that the [TDA] had the effect of conferring a private civil right of action on an individual member of the public who could prove damage as a result of an offence under the Act."  That decision may not, however, prevent consumers from arguing that they can prove damage as a result of a "prohibition", rather than as a result of an offence, under the CPUTR. 

Reg 19 imposes a duty on every enforcement authority, that is, weights and measures authorities and the Office of Fair Trading ("OFT"), to enforce the Regulations but neither it, nor any other provision of the CPUTR, restricts the power to prosecute to those who have a duty to do so.  In MFI Furniture Centre Ltd v Hibbert (1996) 160 JP 178, the question arose as to whether the local weights and measures authority had given Mr Hibbert, a trading standards officer, delegated authority to prosecute on its behalf under s 20 CPA.  Balcombe LJ noted that although the CPA imposed a duty on every weights and measures authority to enforce the CPA, it "does not limit the powers of others to prosecute.  Thus Mr Hibbert, like any other person, had the power to prosecute – see, e.g., s 6 of the Prosecution of Offences Act 1965 (sic). … His authority to do so on behalf of the Council was irrelevant to the validity of the proceedings".  Similarly, notwithstanding the absence of any provision in the CPUTR allowing this, anyone may prosecute under those regulations.  Arguably the lack of any provision expressly enabling an individual to seek civil redress for the breach of a prohibition should equally not prevent an individual from taking civil action.  There is, however, no provision equivalent to s 6 of the Prosecution of Offences Act 1985 (note the typographical error in the year of the Act in Hibbert) which confers on individuals a right to sue for breach of a statutory prohibition.  Consumers may, nonetheless, seek to bolster an existing civil cause of action by adducing evidence that the defendant has engaged in a prohibited commercial practice.  It may be that some negligent statements constitute an unfair commercial practice under the CPUTR and also give rise to a claim in tort on the basis of Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465; [1963] 2 All ER 575 and, whereas a breach of the prohibited commercial practice is not itself a tort, evidence of a breach may assist in establishing one or more elements of an existing tort such as the expectation that the consumer can trust the trader's representation. 

The CPUTR makes it clear, in reg 29 (which mirrors s 35 of the TDA) that "an agreement shall not be void or unenforceable by reason only of a breach of these Regulations".  The contractual rights of consumers are therefore safeguarded although they could have been enhanced by making such agreements voidable at the option of the consumer.

Commercial Practices

Commercial practices lie at the heart of the CPUTR and reg 2(1) defines "commercial practice" as meaning "any act, omission, course of conduct, representation or commercial communication (including advertising and marketing) by a trader, which is directly connected with the promotion, sale or supply of a product to or from consumers, whether occurring before, during or after a commercial transaction (if any) in relation to a product."  "Consumer" means "any individual who in relation to a commercial practice is acting for purposes which are outside his business."  "Product" means "any goods or service and includes immovable property, rights and obligations" and "transactional decision" means any decision taken by a consumer, whether it is to act or to refrain from acting, concerning (a) whether, how and on what terms to purchase, make payment in whole or in part for, retain or dispose of a product; or (b) whether, how and on what terms to exercise a contractual right in relation to a product."

It will be seen from these definitions that the scope of the CPUTR is very wide and that offences do not necessarily depend on a commercial transaction being concluded.  The prohibitions and offences, merely require that a transactional "decision" is taken (or is likely to be taken) whether or not that decision is put into effect. 

The definition of "trader" is "any person who in relation to a commercial practice is acting for purposes relating to his business" but goes on to expressly include "anyone acting in the name of or on behalf of a trader".  This addresses the decision of  the House of Lords, in R v Warwickshire County Council ex parte Johnson [1993] AC 583, that the words  "in the course of a business of his", in the former s 20 of the CPA, did not include an employee.  Employees of traders acting in the course of their employment are therefore also traders.  The owner of the business will continue to be vicariously liable for the acts of his employees (see Mear v Baker (1954) JP 118 and St Helens MBC v Hill (1992) 156 JP 602).  In relation to offences under reg 8, however, the directing mind of a company will only be liable for commercial practices, knowingly or recklessly engaged in by its employees, if it had delegated its functions of management to such employees (see Airtours plc v Shipley (1994) 158 JP 835). 

A trader, when acting for the purposes of his business, cannot also be a consumer and so is not directly protected by the CPUTR from the unlawful acts or omissions of other traders.  A trader who is the victim of another trader may, however, be safeguarded by the CPUTR's cousin, the Business Protection from Misleading Marketing Regulations 2008, post.

The "average consumer"

The only type of consumer with which the CPUTR are concerned is the "average consumer".  Reg 2(2) tells us that: "In determining the effect of a commercial practice on the average consumer where the practice reaches or is addressed to a consumer or consumers account shall be taken of the material characteristics of such an average consumer including his being reasonably well informed, reasonably observant and circumspect."  This part of the definition seeks to adopt the meaning, referred to in the preamble to the UCPD, given to the term "average consumer" by such European Court of Justice ("ECJ") decisions as that in Case C-210/96 Gut Springenheide GmbH and Tusky v Oberkreisdirektor des Kreises Steinfurt - Amt für Lebensmittelüberwachung [1998] ECR I-04657. 

Reg 2(3) says that "paragraphs (4) and (5) set out the circumstances in which a reference to the average consumer shall be read as in addition referring to the average member of a particular group of consumers."  Although reg 2(3) does not expressly say so, its words can only mean that reg 2(4) and reg 2(5) are each to be read "in addition" to reg 2(2) which immediately precedes it and which gives the primary interpretation of "average consumer".  Reg 2(4) provides that "…where the practice is directed to a particular group of consumers, a reference to the average consumer shall be read as referring to the average member of that group."  There appears to be no difficulty in reading reg 2(4) as being "in addition" to reg 2(2) as the average member of any particular group can be taken to be reasonably well informed, reasonably observant and circumspect in relation to matters material to that group.  It becomes somewhat more difficult, however, to read reg 2(5) "in addition" to reg 2(2).  Reg 2(5), as we shall see, largely refers to groups of consumers who are particularly vulnerable in a way which impacts on their ability to understand a commercial practice as a result of mental impairment.  This provision also includes those who are vulnerable as a result of physical infirmity.  In so far as it relates to those who are mentally infirm, it is absurd to read the provision as "in addition" to reg 2(2) which attributes to such consumers the characteristics of being reasonably well informed, reasonably observant and circumspect.  In so far as reg 2(5) relates to those who are physically infirm (but not mentally infirm or prone to undue credulity) such groups could have been covered by reg 2(4). 

Reg 2(5) provides that: "Where a clearly identifiable group of consumers is particularly vulnerable to the practice or the underlying product because of their mental or physical infirmity, age or credulity in a way which the trader could reasonably be expected to foresee, and the practice is likely to materially distort the economic behaviour only of that group, a reference to the average consumer shall be read as referring to the average member of that group."  As we shall see, the interpretation of "materially distort the economic behaviour" says it only applies "in relation to an average consumer".  Given that the current context is part of the interpretation of "average consumer" the meaning of "materially distort the economic behaviour" ought therefore to apply.  Simply substituting the words of that definition one gets: "Where a clearly identifiable group of consumers is particularly vulnerable to the practice or the underlying product because of their mental or physical infirmity, age or credulity in a way which the trader could reasonably be expected to foresee, and the practice is likely to [appreciably to impair the average consumer's ability to make an informed decision thereby causing him to take a transactional decision that he would not have taken otherwise] only of that group, a reference to the average consumer shall be read as referring to the average member of that group."  Clearly a straight substitution does not make the provision easy to follow, particularly as the words "average consumer" appear again in the substituted phrase.  If those words were then replaced by the words they are interpreted to mean, the definition of average consumer, in relation to the vulnerable group, would be infinitely long.  However, putting the words in meaningful order, omitting the superfluous words "he would not have taken otherwise" and adding the additional words (here italicised), which apply by virtue of reg 2(6), one can arrive at: "Where a clearly identifiable group of consumers is particularly vulnerable to the practice or the underlying product because of their mental or physical infirmity, age or credulity in a way which the trader could reasonably be expected to foresee, and the practice is likely to appreciably impair the ability of only consumers of that group to make an informed decision, thereby causing them to take a transactional decision, a reference to the average consumer shall be read as referring to the average member of that group but without prejudice to the common and legitimate advertising practice of making exaggerated statements which are not meant to be taken literally."  The italicised words effectively describe what is often termed "sales puff" and tend to confirm the legislative intent that the average "vulnerable" consumer of the type described is not to be taken to be imbued with the characteristics of being reasonably well informed, reasonably observant and circumspect.  That does, however, lead to further difficulty.

When dealing with those who are particularly vulnerable because of a mental infirmity, one can see why it would be overly restrictive of trade practice to protect such consumers from sales puff which those not suffering from a mental infirmity would readily recognise as "exaggerated statements which are not meant to be taken literally".  It is not so clear, however, why the sales puff caveat provided by reg 2(6) should have been expressed to apply to all those consumers covered by reg 2(5), and hence including those who are particularly vulnerable as a result of a physical disability but who are mentally sound.  Indeed, although reg 2(6) is only expressed to apply to reg 2(5), given that it characterises obviously exaggerated advertising as a "legitimate" practice and given that the average consumer falling outside of reg 2(5) is likely to see it for what it is anyway, the CPUTR seem to be endorsing sales puff as an acceptable commercial practice in relation to all categories of average consumer.  It must be assumed that the words "not meant to" in the phrase "not meant to be taken literally" are to be read objectively.  In the case of In The Pink Ltd v North East Lincolnshire Council [2005] EWHC 1111 (Admin), the Divisional Court had to consider whether an "Office Stationery Set", apparently meant for children (but which contained a craft knife) was "designed or clearly intended for use in play by children of less than 14 years of age" within the meaning of reg 3(1) of the Toys (Safety) Regulations 1995.  Sedley LJ held that:  "The regulation uses the concepts of design and clear intent, not in order to read the distributors' or sellers' minds but as an objective description of what the justices usefully refer to as the targeting of a product; in other words, at whom is it aimed?  To answer this, anything logically indicative either way is admissible." 

Returning to the meaning of the words "in addition" in reg 2(3), it appears that they are ambiguous in terms of whether they are to be applied in a conjunctive or disjunctive sense.  Resolving the ambiguity in a meaningful way would suggest applying the words "in addition" such that regs 2(2) and (4) are read together but that reg 2(2) is only read together with that part of reg 2(5) which does not relate to those with a mental infirmity of any description.  Or, alternatively, that in reading reg 2(2) in addition to reg 2(5) regard is had to the "material characteristics" of those in that group but only including the characteristics of being "reasonably well informed, reasonably observant and circumspect" where they are in fact material characteristics of the group of consumers concerned.  This would effectively imply reading additional words into reg 2(2) such as those suggested here in square brackets:  "In determining the effect of a commercial practice on the average consumer where the practice reaches or is addressed to a consumer or consumers account shall be taken of the material characteristics of such an average consumer including [where appropriate, having regard to his mental capacity] his being reasonably well informed, reasonably observant and circumspect."                            

 

 

 

The CPUTR offences

Although the offence provisions, in regs 8 to 12 of the CPUTR, appear below the sub-heading "offences relating to unfair commercial practices", there is no reference to "unfair" commercial practices in any of them.  The old common law rule of statutory interpretation that headings and side notes do not constitute a legitimate aid to the construction of legislation has been modified, but they still do not have as much weight as the substantive text.  Thus, in R v Montila [2004] UKHL 50, Lord Bingham, rejected the dictum of Phillimore LJ in Re Woking Urban District Council (Basingstoke Canal) Act 1911 [1914] 1 Ch 300, where he said that marginal notes "are inserted not by Parliament nor under the authority of Parliament, but by irresponsible persons", as being no longer true and "out of keeping with the modern approach to the interpretation of statutes and statutory instruments".  Lord Bingham said, albeit in relation to a statute rather than a statutory instrument: "One cannot ignore the fact that the headings and side notes are included on the face of the Bill throughout its passage through the Legislature.  They are there for guidance.  They provide the context for an examination of those parts of the Bill that are open for debate.  Subject, of course, to the fact that they are unamendable, they ought to be open to consideration as part of the enactment when it reaches the statute book."

Taking the heading "offences relating to unfair commercial practices" into consideration in interpreting regs 8 to 12 can do no more than indicate, which is indeed the case, that the offences "relate" to the previously defined "unfair commercial practices"; indeed they are couched in very similar terms.  But, why duplicate?  The commercial practices in the offence provisions may well be unfair but they are neither dependent upon unfairness nor the definition of unfair commercial practices in reg 3.  Reg 9, for example, which deals with offences relating to misleading actions, provides that it is an offence for a trader to engage in a "commercial practice", not an "unfair commercial practice", which is misleading under reg 5.  No reference is made to reg 3 which defines an "unfair commercial practice".  Similarly, reg 10 provides, by reference to reg 6, but with no mention of unfairness or reg 3, that a trader is guilty of an offence if he engages in a commercial practice which is a misleading omission.  Reg 11, with reference to reg 7, but again with no mention of unfairness or reg 3, provides that a trader is guilty of an offence if he engages in a commercial practice which is aggressive. 

It follows that unfairness, per se, is not an ingredient of the offences under regs 9, 10 or 11.  This is largely inconsequential since there is no definition of "unfair" other than as a part of "unfair commercial practices".  Although all commercial practices which give rise to offences are also prohibited as being unfair commercial practices, not all unfair commercial practices found offences. 

The only offence provision, which makes any reference to reg 3, is reg 8 and those references are unnecessary and tautologous and hence provide no additional meaning.  This can be demonstrated by setting out the text of reg 8(1) with the references to reg 3 given in square brackets followed by alternative words, in a second set of square brackets, which could be substituted for them by reading in the relevant words from reg 3.  Hence:

"A trader is guilty of an offence if—

(a) he knowingly or recklessly engages in a commercial practice which contravenes the requirements of professional diligence [under regulation 3(3)(a)] [it contravenes the requirements of professional diligence]; and

(b) The practice materially distorts or is likely to materially distort the economic behaviour of the average consumer with regard to the product [under regulation 3(3)(b)] [it materially distorts or is likely to materially distort the economic behaviour of the average consumer with regard to the product.]

It may, of course, be argued that the use of the word "under" in reg 8(1) requires not only the importation of the wording in regs 3(3)(a) and (b), but also the words of reg 3(3) which precede them, that is "a commercial practice is unfair if -", but that would achieve nothing in terms of establishing the elements of the offence.  Even if it were said that the commercial practice had to be "unfair" for the purposes of reg 8 (but bizarrely not for the offences created by regs 9 to 11) establishing that unfairness is already achieved by satisfying the elements of the offence which precede the references to reg 3.

The remaining offence provision in Part 3 is in reg 12 which provides that "a trader is guilty of an offence if he engages in a commercial practice set out in any of paragraphs 1 to 10, 12 to 27 and 29 to 31 of Schedule 1."  So, once again, there is no reference to unfairness or to reg 3 which defines an unfair commercial practice.  Although the list of commercial practices set out in Schedule 1 are preceded by the heading "commercial practices which are in all circumstances unfair", that merely indicates that they are unfair not that that there has to be a finding of unfairness.  Furthermore, that heading must be intended to refer to the entire list of commercial practices, including paragraphs 11 and 28 which are excluded from the offence provisions.

It follows that in order to prove an offence under Part 3 CPUTR it is not necessary to establish unfairness under reg 3 although, as a result of the overlapping drafting, if the offence is proved, it will inevitably follow that the commercial practice concerned was an unfair one. 

There is one Regulation, which is not a criminal one, that does depend on the "unfair" commercial practices defined in reg 3.  That provision is reg 4 which is very brief.  It provides: "The promotion of any unfair commercial practice by a code owner in a code of conduct is prohibited."  Such promotion is therefore not allowed but, if it occurred, would not attract a criminal penalty under the CPUTR.

It must be assumed that the legislature had a purpose in labelling commercial practices as "unfair" and "prohibited" without directly criminalising them.  If, as the BERR assert, the prohibitions do not enable individual consumers to sue for their breach, the answer must be that these prohibitions are intended to bite under the civil remedy provided by Part 8 of the EA.  It will be recalled that a "community infringement" does not have to be a criminal offence but can be any form of contravention of a listed Directive.  Breach of an "unfair commercial practice" prohibited by reg 3 or breach of the prohibition in reg 4 will thus allow the enforcement authority to apply for enforcement orders under the EA requiring, inter alia, transgressing traders to take steps "not to continue or repeat" the contravening conduct.

Reg 13 provides that the penalty for offences under regs 8 to 12 is, on summary conviction, a fine not exceeding the statutory maximum and, on indictment, a fine and/or imprisonment for up to two years.

The causation limb

Another area in which the legislature has introduced an unnecessary complication is in providing that, for a commercial practice which contravenes the requirements of professional diligence to be unfair under reg 3, or an offence under reg 8, it is necessary to show that the practice "materially distorts or is likely to materially distort the economic behaviour of the average consumer with regard to the product."  Reg 2 tells us that "'materially distort the economic behaviour' means in relation to an average consumer, appreciably to impair the average consumer's ability to make an informed decision thereby causing him to take a transactional decision that he would not have taken otherwise'.  But the words "materially distort the economic behaviour" are only ever used in the CPUTR in relation to an average consumer.  It follows that they always mean "appreciably to impair the average consumer's ability to make an informed decision thereby causing him to take a transactional decision that he would not have taken otherwise".  Those words could therefore have been substituted in regs 3 and 8 such that the second limb for prohibited unfairness or for an offence would be: "the practice appreciably impairs or is likely to appreciably impair the average consumer's ability to make an informed decision with regard to the product thereby causing him to take a transactional decision that he would not have taken otherwise."  However, one might still be left wondering what distinction, if any, is to be drawn between the use of the word "make" in relation to an "informed decision" and the word "take" in relation to a "transactional decision".  Furthermore, as we shall see, reg 7 which defines an aggressive commercial practice (outlawed as an offence by reg 11) uses the term "significantly impairs".  Is there a real difference, in this context, between an appreciable impairment and a significant impairment and, if there is, is that difference appreciable or significant?  Although "significant" does not mean the same as "appreciable", can there be an "appreciable impairment" that is not also significant, or a "significant impairment" that is not also appreciable?

It has to be acknowledged that the CPUTR in referring to "materially distorting economic behaviour" and then interpreting those words has substantially adopted the same wording and approach used by the UCPD itself.  Just because a European Directive is unduly complicated, however, it does not mean, that the UK should follow suit.  If "A" means "B" then why not use "B" in the first place?  It would, of course, have been entirely different if "A" was said to merely "include B".  It might also be different if "A" was but a single word used as shorthand for "B" which was a phrase or had various meanings. 

A further advantage of dispensing with the term "materially distorting economic behaviour" and cutting straight to the chase is that the second limb (the "causation limb") of the prohibition and offence provisions that relate to each of "misleading actions" (reg 5(3)(b)), "misleading omissions" (reg 6(1)) and "aggressive commercial practices" (reg 7(1)(b)) include the requirement that the commercial practice "causes or is likely to cause him to take a transactional decision he would not have taken otherwise."  Although the meaning of the second limb in relation to professional diligence is couched in different terms, which will be explored in more detail post, it nonetheless expressly requires causation.  It would have been convenient for such commonality in the wording of the causation limb as there is to have extended directly to the second limb relating to professional diligence without having to achieve it by unnecessary reference to the interpretation provisions.  Such consistency and convenience could have been achieved without doing any damage to the meaning of any of the provisions.

Unfortunately the UK legislature has compounded the matter by not simply copying the definition of "to materially distort the economic behaviour of consumers" from the UCPD but by embellishing it with, as already noted, the unnecessary preface that the definition only applies where the phrase is used "in relation to an average consumer".  It then goes on to speak not, as the UCPD does, of the "consumer's ability to make an informed decision …" but adds a further reference to "average" by speaking of the "average consumer's ability to make an informed decision …".  In relation to reg 8 it is possible to weed out the excessive use of "average" but the plethora of "average consumers" becomes rather more of a glut when the term "materially distort the economic behaviour of consumers" is used in reg 2(5) to interpret the meaning of "average consumer" itself, where it applies to vulnerable consumers (see ante).

Each version of the causation limb looks at the commercial practice causing the average consumer to take a transactional decision "he would not have taken otherwise".  It may have been more grammatically correct for those words to have read "he would not have otherwise taken."  But, one has to ask what those words, however arranged, constructively add to that which precedes them.  If a commercial practice "causes, or is likely to cause" a consumer, to take a decision does it not follow that, but for that causation, the consumer would not have taken that decision?

The CPUTR are fraught with pleonasms, tautology and inconsistency.  In respect of misleading actions, reg 5(2) simply refers to commercial practices which cause a transactional decision.  In relation to misleading omissions, however, reg 6(1) provides for commercial practices which "as a result" cause a transactional decision and reg 7(1) refers to aggressive commercial practices which "thereby" cause a transactional decision. [Note: See the postscript where it is acknowledged that the absence in reg 5(2) of the words "as a result of" or "thereby" is an aid to interpretation.]

For the legislation to be workable, a commercial practice must be taken to be capable of being the "cause" of a transactional decision even if there were other causal factors.  If the legislation was intended to only apply where the commercial practice was the "sole cause" it would have been easy for it to have been so expressed.  The commercial practice must, however, have a significant impact on the mind of the consumer if it is to be the "cause" of a decision made by him.  The false representation that a 99 room hotel has 100 rooms may not influence an average consumer's decision whether or not to stay in that hotel, but it may influence his decision on whether or not to buy the hotel.

[Note that, in Office of Fair Trading v Purely Creative Ltd, [2011] EWHC 106 (Ch), Briggs J concluded that it was not necessary that the misleading act or omission was the sole cause of the average consumer's decision.  If, however, "the court concludes that, but for the misleading act or omission, the average consumer would nonetheless have decided as he did" there would be no infringement.]

The meaning of "likely"

Whereas the CPUTR goes into some detail in defining the "average consumer" they do not deal with the meaning of "likely" as it appears in the various causation limbs or as it appears in the first limb of a "misleading action", as set out in reg 5(2)(a), which is the nearest equivalent to applying a false trade description formerly outlawed by s 1(1)(a) TDA with its deeming provisions based on what is "likely" in s 3 thereof.

The question arises as to what proportion of average consumers must be misled or can be expected to be misled, before it can be said that the average consumer is likely to be deceived or is likely to be caused to take a transactional decision.  Perhaps the leading case on this question, as it applied to the TDA, was Doble v David Greig Ltd [1972] 2 All ER 195, where, in relation to the former s 11(2) TDA, which was worded in a similar way to s 3(2) TDA, Ashworth J said: "This section was so worded as to cater for cases where possibly the wording, strictly construed, might admit of two constructions.  The whole point in my view of including in s 11(2) the words 'likely to be taken as an indication' shows that Parliament was intending to protect people who might otherwise be met by a defence that on its true construction the offending words meant something different from that which they thought."  Forbes J said: "The offence is giving an indication likely to be taken as an indication of the kind described in the Act.  If it is reasonably possible that some customers might interpret the label as an indication of that kind, it seems to me that an offence is committed, even though many more customers might in fact take the opposite view.  In other words the Act requires a shopkeeper ... to take pains to resolve possible ambiguities of this kind, and if they are not adequately resolved an offence is committed."  This concept was followed, in relation to misleading price indications under s 20 CPA, in MGN Ltd v Northamptonshire County Council Council (1997) 161 JP 735, where Simon Brown LJ said: "It is … sufficient for the prosecutor's purpose to establish that some readers might reasonably interpret the advertisement as an indication that the watches are being sold elsewhere at a price approximating to their stated value, even though many more readers might, in fact, take a contrary view."  The law of England and Wales has therefore hitherto taken the view that, for the purposes of establishing a consumer protection offence, a representation can be taken as likely to mislead consumers even if it can only be shown that a minority of consumers would be misled.  What is clear is that "likely" should not be equated with "more likely than not".  This approach appears to be entirely consistent with that taken by the ECJ and, as the CPUTR derive from European legislation, the legacy of Doble v David Greig should survive. 

In the Gut Springenheide case, ante, the ECJ was considering the approximation of Community law in relation to a Directive legislating against misleading statements on the packaging of eggs.  The ECJ decided, inte alia, that "in the absence of any Community provision on this point, it is for the national court … to determine, in accordance with its own national law, the percentage of consumers misled by a promotional description or statement that, in its view, would be sufficiently significant in order to justify, where appropriate, banning its use."  Hence, the "average" consumer is not represented by any particular percentage of consumers.  One can extrapolate that a statement made to a consumer is misleading (or likely to deceive, or likely to cause a transactional decision to be taken) if it would mislead a sufficiently "significant" percentage of reasonably well informed, reasonably observant and circumspect consumers.  In Case C-373/90 X [1992] ECR I–131, the ECJ ruled on a case dealing with comparative advertising and the parallel import of cars.  It held that, in relation to an alleged misleading statement that certain cars imported into France from Belgium were cheaper than those directly available in France, "such a claim can only be held misleading if it is established that the decision to buy on the part of a significant number of consumers to whom the advertising in question is addressed was made in ignorance of the fact that the lower price of the vehicles was matched by a smaller number of accessories on the cars sold by the parallel importer."   Case C-356/04 Lidl Belgium GmbH & Co KG v Etablissementen Franz Colruyt NV [2006] ECR I-08501, also considered the scope of a Directive relating to comparative advertising and looked at its effect on the consumers "decision to buy".  This is of particular significance in view of the causation test in the UCPD which also outlaws misleading price comparisons.  The ECJ held, inter alia, that: "Comparative advertising … should, for example, be considered to be misleading if it is established, in the light of all the relevant circumstances of the particular case, that the decision to buy on the part of a significant number of consumers to whom that advertising is addressed is made in the mistaken belief that all the advertiser's products have been taken into account in calculating the general price level, and the amount of savings, that are claimed by the advertising."

What constitutes a sufficiently "significant" number of consumers is a matter for each Member State to determine.  In Case C-220/98 Estée Lauder Cosmetics GmbH & Co. OHG v Lancaster Group GmbH [2000] ECR I-117, the defendant, Lancaster, marketed a cosmetic firming cream using the term "lifting" in the name of the product.  Estée Lauder, sought an order from the German court prohibiting the use of the description "lifting" on the basis that it was misleading because it gave consumers the impression that using the product would achieve lasting effects identical or comparable to surgical lifting, whereas that was not the case.  The German court considered that the use of the word "lifting" was contrary to its national law which prohibited the marketing of cosmetics under misleading names which attributed to them effects which they did not have.  Under German case law the name would be misleading if a "not inconsiderable number of consumers", which was about 10%-15%, are misled.  The German court sought a preliminary ruling on whether the restriction on the free movement of goods, which would result from the prohibition sought by Estée Lauder, would be compatible with the EC Treaty.

The ECJ held that: "Although, at first sight, the average consumer - reasonably well informed and reasonably observant and circumspect - ought not to expect a cream whose name incorporates the term 'lifting' to produce enduring effects, it nevertheless remains for the national court to determine, in the light of all the relevant factors, whether that is the position in this case.  In the absence of any provisions of Community law on this matter, it is for the national court - which may consider it necessary to commission an expert opinion or a survey of public opinion in order to clarify whether or not a promotional description or statement is misleading - to determine, in the light of its own national law, the percentage of consumers misled by that description or statement which would appear to it sufficiently significant to justify prohibiting its use (see Gut Springenheide)." It is implicit in the ECJ's decision that, if the national law of a Member State considered a proportion of consumers of 10% - 15% to be sufficiently "significant" the ECJ would not regard that as being too low.

English and Welsh criminal law does not permit expert opinion to determine whether a statement is misleading (see, for example, Concentrated Foods Ltd v Champ [1944] 1 KB 342, and In The Pink Ltd v North East Lincolnshire Council, ante).  English courts have, however, admitted evidence of public surveys to indicate the expectations of consumers.  Notable examples of this are where the court took account of surveys to ascertain the local custom of an area as to whether a pint of beer should be a pint of liquid or whether it can include the froth on top of the liquid (see Bennett v Markham [1982] 1 WLR 1230, and Allied Domecq Leisure Ltd v Cooper (1999) 163 JP 1).  Surveys were admitted in evidence in R v Lake Estates Watersports Ltd [2002] EWCA Crim 2067 to determine what the public regarded as good practice relating to safety precautions at a number of watersports venues.  

[Note that, in Office of Fair Trading v Purely Creative Ltd, [2011] EWHC 106 (Ch), it was "common ground" that "the phrase 'causes or is likely to cause' is equivalent to the English standard of the balance of probabilities."  From this concession, Briggs J effectively concluded that the word "likely" could be read as "probably".  This significantly reduces the worth of the CPUTR in fulfilling the stated purpose of the UCPD which is to "achieve a high level of consumer protection".  However, as there was no argument on the point, another court, particularly one dealing with a criminal appeal, may reach a different conclusion when looking at the ECJ jurisprudence set out above.]

Breach of Professional Diligence

The offence provision in reg 8, once pruned down as previously suggested is fairly succinct:  A trader is guilty of an offence if: 1) he knowingly or recklessly engages in a commercial practice which contravenes the requirements of professional diligence; and 2) the practice appreciably impairs or is likely to appreciably impair the average consumer's ability to make an informed decision with regard to the product thereby causing him to take a transactional decision.  It is tempting to imagine, the reg 8 offence reduced still further by replacing the second limb with the causation limb relating to offences under regs 9 to 11.  That would, however, entail a ruthless dismissal of the reference to the appreciable impairment of the average consumer's ability to make an informed decision as mere surplusage.  In most cases a commercial practice which contravenes the requirements of professional diligence to the extent that it is likely to "cause" an average consumer to take a transactional decision must inevitably have appreciably impaired the consumer's ability to make an informed decision with regard to the product.  There may, however, be situations where, although a commercial practice contravenes the requirements of professional diligence and causes a consumer to take a transactional decision, the consumers ability to make an informed decision was not impaired.  Suppose, for example, a trader offers for sale fake Rolex watches.  Although he makes it absolutely clear that they are not genuine Rolex watches, they nonetheless have all the outward appearance of being genuine and have the "Rolex" emblem displayed on their faces.  As the trader knows, there is a demand for such watches from those who cannot afford the real thing but who would nonetheless like to be fashionable.  As such consumers are not misled, the causation limb of reg 8 is not satisfied.  On the same facts there may, however, be an offence under reg 9 (see post) with its less onerous causation limb since the false information on the face of the watch will have caused the transactional decision to be made notwithstanding that the consumers "ability" to make an informed decision was not in any way impaired.  These facts may also give rise to an offence under s 92 of the Trade Marks Act 1994 (see Crown Prosecution Service v Morgan [2006] EWHC 1742).  Another example where the distinction between the causation limbs relating to regs 8 and 9 may be significant is in relation to the sale of "clocked" motor vehicles; vehicles which have had their odometer or mileage readings turned back.  If a trader sells a car with an artificially low odometer reading, he may find his car appeals to a group of consumers who, provided that they pay a price which reflects the true mileage, will prefer to buy a car which purports to have a low mileage.  This may either be for reasons of vanity or because of a longer term plan to capitalise on the low mileage when reselling the car.  If the commercial practice is directed at the group of consumers, however small, which would buy such cars, the average consumer is the average consumer from that group.  Such consumers are able to make an informed decision but may still decide to purchase the car as a result of the false information given on its odometer.

"Professional diligence" is defined in reg 2 as "the standard of special skill and care which a trader may reasonably be expected to exercise towards consumers which is commensurate with either (a) honest market practice in the trader's field of activity, or (b) the general principle of good faith in the trader's field of activity".

Reg 8 creates the only one of the five offence provisions relating to commercial practices which includes an element of mens rea.  "Recklessly" is interpreted in reg 8(2) thusly: "A trader who engages in a commercial practice without regard to whether the practice contravenes the requirements of professional diligence shall be deemed recklessly to engage in the practice, whether or not the trader has reason for believing that the practice might contravene those requirements."  This wording was designed to reflect the meaning of "recklessly" in the former s 14(2)(b) TDA and hence Widgery LCJ's comments in MFI Warehouses Ltd v Nattrass [1973] 1 All ER 762, are almost directly applicable: "Recklessly", he said, "in the context of the [TDA] does not involve dishonesty.  Accordingly it is not necessary to prove that the statement was made with that degree of irresponsibility which is implied in the phrase 'careless whether it be true or false'.  I think it suffices for present purposes if the prosecution can show that the advertiser did not have regard to the truth or falsity of his advertisement even though it cannot be shown that he was deliberately closing his eyes to the truth, or that he had any kind of dishonest mind."

Misleading actions

Reg 5 sets out those commercial practices which are "misleading actions".  These actions are prohibited by reg 3(1) and (4)(a) and (excluding reg 5(3)(b)) are offences, when engaged in by a trader, by virtue of reg 9. 

The primary category of misleading actions are those commercial practices where (a) "it contains false information, and is therefore untruthful" in relation to any of the matters listed in reg 5(4), or where "it or its overall presentation in any way deceives or is likely to deceive the average consumer" in relation to a reg 5(4) matter, even if the information is factually correct; and (b) "it causes or is likely to cause the average consumer to take a transactional decision ..."  The matters listed in reg 5(4) reflect and cover, but do not replicate, the list of matters which were trade descriptions under s 2 TDA. 

The second kind of criminalised misleading actions are those commercial practices which concern any marketing of a product (including comparative advertising) which creates confusion with any products, trade marks, trade names or other distinguishing marks of a competitor and where it causes or is likely to cause the average consumer to take a transactional decision, taking account of its factual context and all its features and circumstances.  As it is an ingredient of this offence that the marketing of a product "creates confusion", and not merely that it is likely to do so, it means that in order to prove the offence, evidence will be required that at least one consumer was confused.  This provision may be particularly useful to protect intellectual property rights where the recognised distinguishing mark of a trader's competitor is not a "registered" trade mark and hence is not protected by the Trade Marks Act 1994.

It can be seen that the main category of criminalised "misleading action" has much in common with the former offence of applying a false trade description under the TDA.  In each case primary offences can only be committed by traders.  A private individual could nonetheless offend under the TDA, by virtue of s 23 thereof, if an offence by a trader was due to that individual's act or default (see Olgiersson v Kitching [1986] 1 WLR 304).  The by-pass provision in reg 16 CPUTR is modelled on s 23 TDA and expressly provides that a person can commit an offence through his act or default whether or not he is a trader and whether or not his act or default is itself a commercial practice.

Just as the TDA dealt with false trade descriptions, in its s 1, and misleading trade descriptions which were deemed to be false in s 3, so too reg 5 distinguishes between commercial practices which give false information and those which, whether by their overall presentation or otherwise, deceive or are likely to deceive.  The word "deceive" is not defined in the CPUTR but its dictionary meaning includes "mislead".  It should be noted that if a commercial practice gives false information, its overall presentation and whether or not anyone is or would be misled by it (subject to the causation tests and, where applicable, it not being "legitimate" sales puff) are irrelevant just as they were in relation to the TDA (see, for example, Chidwick v Beer [1974] RTR 415 and Ashurst v Hayes and Benross Trading Co Ltd (1974) 82 ITSA MR 161). 

The distinction between false and misleading was epitomised by the Rubik Cube in Surrey County Council v Clark (1992) 156 JP 798.  In that case, the court was concerned with the question of falsity in relation to a counterfeit puzzle resembling a Rubik Cube but which did not bear the name "Rubik", or the manufacture's name, "Matchbox".  Clark was charged with supplying goods to which a false trade description was applied by means of the picture on the packaging and the puzzle itself.  Clark was acquitted.  On the prosecutor's appeal Taylor LJ said: "This raises the difficult question as to what distinguishes an indirect indication amounting to a false description … from a description not false but misleading. … The distinction may be between an indication which tells a lie about itself and one which, whilst accurate on its face, misleads by its associations in the mind of the consumer.  Had Rubik been mentioned, or had a logo applied by Matchbox to all their products been used, there would clearly have been a false but indirect assertion that Matchbox were the manufacturers. … Different considerations ... apply when one proceeds to s 3(2) of the Act ... We have seen the impugned article and an example of the Rubik equivalent. … The get up in each case is practically identical in size, construction, colouring, design and materials. … Even though it was not a false trade description … it was deemed to be, by reason of the misleading … under s 3(2)."  The same facts neatly illustrate the distinction between false information and deceit, for the purposes of regs 5 and 9, particularly where that deceit arises from a product's overall presentation.

Even where falsity is not alleged, there can still be an offence under reg 9 based on deceit, without it being shown that anyone was actually deceived or misled – it suffices if the average consumer is "likely" to be deceived.  This again mirrors the situation under the TDA, but note that in Dixons Ltd v Barnett (1989) 153 JP 268, Bingham LJ said that the fact that someone was actually misled was a "powerful practical consideration" in establishing that the description was misleading.  Judicial precedent relating to misleading price indications, under the former s 20 CPA, also shows that a statement or indication can be misleading even if no one is misled.  Hence the wonderfully ironic dicta of Scott Baker J, in AG Stanley Ltd (T/A Fads) v Surrey County Council (1995) 159 JP 691, that "it is not material to the issues, that Mr Muddell was not misled", is still apposite.  But, has this situation changed as a result of the causation test?

It may be argued that, although it is not necessary to show that a consumer was deceived (but merely that the average consumer was likely to be deceived) in order to satisfy the first limb of an offence under reg 8, such deception is nonetheless required in order to satisfy the causation test.  If our average consumer, say Mr Muddell, is not misled by a commercial practice can it be said that such practice caused him to take a transactional decision?  The answer to that question, in most cases, may well be "no".  It will be remembered, however, that the causation limb does not require that any particular consumer is actually caused to take a transactional decision so long as it can be shown that the practice was likely to cause the average consumer to take such a decision.  If it were necessary in all cases for a consumer to actually be misled, it would mean that the power provided by reg 20, enabling enforcement officers to make test purchases, would be of no value where the officer, due to his training, experience and any prior knowledge, is not himself misled.  In Toys 'R' Us v Gloucestershire County Council (1994) 158 JP 338, Kennedy LJ held, even in relation to offences under the former s 20 CPA where "consumer" was defined as "any person who might wish to be supplied with the goods for his own private use or consumption", that: "The fact that a trading standards officer does not in fact wish to be supplied is not material, and of course if he visits a supermarket during opening hours ticket prices which he sees will be seen by others too, because they are an indication to consumers as to price."  It does not matter that an enforcement officer may not come within the definition of an "average consumer" as the statutory scheme is concerned, not necessarily with the effect of a commercial practice on any particular  individual but its effect, or likely effect, on those who are "average consumers".  The causation limb in relation to offences under regs 10 and 11 also look at the likely effect on the average consumer.  In relation to reg 8 (breach of professional diligence offences), although the causation limb, concludes by only looking at actual rather than likely cause, it is not limited to actual causation given that the limb requires that the consumer practice is one that "materially distorts or is likely to materially distort the economic behaviour of the average consumer …".

The difference between commercial practices which contain false information and those which through their overall presentation or otherwise are deceiving, illustrates that, just as was the case with a trade description, a representation (which is a commercial practice) can be a single piece of information and does not, of itself, include its factual context or all its features and circumstances.  This statutory intent is demonstrated by the fact that the offence involving falsity does not require that the commercial practice is false but merely that it "contains" false information.  Furthermore, the effect of the information on the "average consumer" is not material to its falsity.  The only place where extraneous words or circumstances may play a part in determining whether the false information gives rise to an offence, is in the consideration of the causation limb where certain additional information may have the effect of preventing the false information from causing the average consumer to take a transactional decision (see "the future of disclaimers", post).

Misleading omissions

The definition of "commercial practice" includes any "omission" as well as any act, course of conduct, representation or commercial communication.  Under the TDA it had been held that an omission could constitute a false trade description (see R v Haesler [1973] RTR 486).  The CPUTR have taken this a step further by creating a specific offence in relation to misleading omissions.  Reg 10 provides, in effect, that a trader is guilty of an offence if he engages in a commercial practice which is a misleading omission, that is, in its factual context, taking account of the matters in reg 6(2), it: (a) omits material information, (b) hides material information, (c) provides material information in a manner which is unclear, unintelligible, ambiguous or untimely, or (d) fails to identify its commercial intent, unless this is already apparent from the context; and it causes or is likely to cause the average consumer to take a transactional decision.  The matters in reg 6(2) are: "(a) the features and circumstances of the commercial practice; (b) the limitations of the medium used to communicate the commercial practice (including limitations of space or time); and (c) where the medium used to communicate the commercial practice imposes limitations of space or time, any measures taken by the trader to make the information available to consumers by other means."  "Material information" is defined as meaning, "the information which the average consumer needs, according to the context, to take an informed transactional decision" and "any information requirement which applies in relation to a commercial communication as a result of a Community obligation".  The latter part of this definition includes, for example, information required by the Package Travel, Package Holidays and Package Tours Regulations 1992 and the Consumer Protection (Distance Selling) Regulations 2000.  Where the commercial practice is an invitation to purchase, "material information has an extended meaning including the main characteristics of the product, the price and "where the nature of the product is such that the price cannot reasonably be calculated in advance, the manner in which the price is calculated".

There will inevitably be situations where a trader could engage in a single commercial practice which is both an offending misleading action under reg 9 and an offending misleading omission under reg 10.  The classic trade description of a reduced odometer reading indicating that a car has travelled a lower mileage than it in fact has is a case in point.  The mileage shown on the odometer will be a representation within the meaning of "commercial practice", which gives false information in relation to the main characteristics of the product such as its usage or fitness for purpose and hence, as it is also likely to cause an average consumer to take a transactional decision, it is a "misleading action" under reg 5 which, if engaged in by a trader, is an offence under reg 9.  Alternatively, the omission to give the information which the average consumer needs to make an informed decision, namely the true mileage or, if it is not known, an indication that the recorded mileage is wrong, can also constitute a "misleading omission" under reg 6 and an offence under reg10.  In most cases it will be apparent which offence is the most appropriate.  On occasion, however, a prosecutor may wish to allege more than one offence in relation to the same facts as alternative charges.  In the above scenario there may also be an offence of breaching professional diligence contrary to reg 8.  The prosecutor may wish to allege an offence under reg 8 because it is not subject to the statutory "due diligence" defence provided by reg 17.  On the other hand, he may wish to allege an offence under reg 9 (or possibly reg 10) because there is no mens rea element to be proved in such an offence.  This approach was approved of in R (London Borough of Newham) v Stratford Magistrates' Court [2004] EWHC 2506 (Admin). 

Offences which are obviously misleading omissions, rather than misleading actions, will be those where the information given is true but nonetheless omits important information.  An example might be where an estate agent informs his client, the seller of a house, that he has found a potential buyer for the property who is prepared to pay 95% of the asking price but he fails to disclose that there is another potential buyer who is prepared to pay 100%.  This is likely to be because of a fraud whereby the agent shares in the disclosed buyer's saving.  An offence under reg 10 may be easier to prove than an offence under the Fraud Act 2006.  Reg 10 also covers material information which is hidden, unclear or unintelligible.  The OFT has cited an example of where the trader printed his terms and conditions on the inside of an envelope in small light grey font.

Offers to supply

A key feature of the TDA and s 20 CPA was that a trader could commit an offence under that legislation even if, before a sale or supply was actually made, the consumer had been told the truth or had no reason to remain in a misled state of mind.  Indeed s 1(1)(b) of the TDA provided a specific offence of "offers to supply" goods, in addition to the offence of "supplies" goods, to which a false trade description was applied.  Thus in Lewin v Fuell (1991) 155 JP 206, Woolf LJ said: "It would probably be against the whole intent and purpose of [s 1(1)(b) TDA] ... if it was open to a trader such as Mr Fuell to expose watches and other goods of this sort to which a false trade description was applied and a disclaimer was only made when someone approached him to purchase those goods. ... The section has been designed in a way which creates the offence when the goods are exposed.  If there is to be any disclaimer of any sort it must exist at that time."  Similarly a true statement made at the till comes too late to prevent an offence caused by misleading information at the shelves (see Doble v David Greig Ltd, ante).

[Note: S 6 TDA provided that: "A person exposing goods for supply or having goods in his possession for supply shall be deemed to offer to supply them" and hence that latter term embraced what might otherwise have been regarded as a mere invitation to treat.  See Fisher v Bell [1961] 1 QB 394.]

In relation to the offence provisions under regs 8 to 11 of the CPUTR it cannot properly be argued that if accurate information is given, for example at the till, before a transaction is concluded, that any foregoing commercial practice is not likely to appreciably impair the average consumer's ability to make an informed decision.  If a transactional decision is made by a consumer before he gets to the till then the offence is complete at that stage regardless of whether he goes on to implement that decision.  This is not only clear from the definition of "transactional decision", which includes a decision not to make a purchase and with no requirement that a decision to make a purchase is acted upon, but it is also clear from the last part of the definition of "commercial practice", in particular the words in parenthesis, that is: "… whether occurring before, during or after a commercial transaction (if any) in relation to a product".  In other words the commercial practice has to cause, or be likely to cause, a transactional "decision" and not necessarily that it should be followed through to a transaction.  It will also be noted from reg 6(4) that an "invitation to purchase", which again does not require a purchase to be made, can be a commercial practice.

Schedule 1 – Banned commercial practices

Schedule 1 to the CPUT lists 31 commercial practices which reg 3 declares to be unfair and prohibited.  All but two of these practices, if engaged in by a trader, constitute offences under reg 12.  The two commercial practices beyond the scope of reg 12 are, para 11, using editorial content in the media to promote a product where the fact that a trader has paid for that promotion is not made clear to consumers and, second para 28, "including in an advertisement a direct exhortation to children to buy advertised products or persuade their parents or other adults to buy advertised products for them."  The provision would have been more useful, and would probably then have been included in reg 12, if the banned exhortation had specifically applied to age restricted products such as cigarettes, knives and alcohol, rather than to all products. 

If a trader engages in a commercial practice banned under Schedule 1 (excluding paras 11 and 28) he automatically commits an offence.  There is no mens rea required (except in so far as it is a consequence of the word "deliberately" used in para 13 and the word "intention" used in paras 13 and 18) and there is no causation limb for the prosecution to satisfy.  Such a trader may, however, seek to rely on the due diligence defence in reg 17.

Paras 1 to 3, of Schedule 1, broadly relate to the misuse of codes of conduct or trust or quality marks.  Para 4 deals with false claims that a product has an approval or endorsement.  Paras 5 and 6 deal respectively with "bait advertising" and "bait and switch" and the CPUTR repealed the Mock Auctions Act 1968 which previously covered these practices.  Paras 7 to 9 and para 23 deal with misleading statements as to the legal or actual availability of products or after-sales service.  Para 10 forbids "presenting rights given to consumers in law as a distinctive feature of the trader's offer". Paras 12, 24 to 26, and 30 are referred to, post, under the heading of "Aggressive commercial practices".  Para 13 prohibits the promotion of a product, which is similar to the product of another manufacturer, in such a way as to "deliberately" mislead consumers into thinking that it is the product of that other manufacturer.  Para 14 seeks to outlaw pyramid selling.  Para 15 prohibits false claims that a trader is about to cease trading or move premises.  Para 16 prohibits claims "that products are able to facilitate winning in games of chance".  Note that it is not a necessary ingredient of this ban that the claim must be false or misleading.  Para 17 bans false claims that a product can cure illnesses, dysfunction or malformations.  Para 18 deals with misleading statements as to market conditions.  Para 19 bans the offer of prizes when they, or a reasonable equivalent, are not then awarded.  Para 31 prohibits false impressions that a consumer has won, or will win a prize, if either there is no such prize or the consumer will have to make a payment in relation to claiming it.  Para 20 seeks to curtail the use of the word "free" (see, post, under the heading "Misleading price indications").  Para 21 bans invoicing for products not (yet) ordered.  Para 22 prohibits "falsely claiming or creating the impression that the trader is not acting for purposes relating to his trade, business craft or profession, or falsely representing oneself as a consumer."  The words "trade" and "craft or profession" are otiose as "business" is defined in reg 2 as including "a trade, craft or profession".  This banned practice very much overlaps with the provisions of the Business Advertisements (Disclosure) Order 1977 which is circuitously revoked, as an order made under s 22 of the Fair Trading Act 1973, by reg 30(1) and para 69 of Schedule 2 to the CPUTR.  Para 27 deals with certain practices designed to dissuade a consumer from making an insurance claim.  Para 29 relates to demands for payment in relation to the provision of unsolicited products.

[Note that para 31 was considered in Office of Fair Trading v Purely Creative [2011] EWHC 106, where, applying a purposive approach to interpretation, it was held that, contrary to the literal meaning of the words used, para 31 only applied where the cost to the consumer was more than de minimis in proportion to the value of the prize such that, in reality, the consumer had purchased rather than won the "prize".]

Misleading Price Indications

Misleading price indications were formerly criminalised by s 20 CPA.  They are now dealt with as an integral part of the CPUTR such that a trader giving a misleading price indication could fall foul of the offence provisions in either regs 8, 9 or 10.  Reuniting criminal provisions relating to misleading price indications with those relating to other forms of consumer deception in relation to both goods and services should help to overcome problems such as those which arose in Newell v Taylor (1984) 148 JP 308.  There a trader falsely advertised a video recorder as "free" with every firm order for a new Renault car.  The video recorder was not "absolutely free" because, during the promotion, purchasers were not allowed as much by way of discount or part-exchange as normal.  The defendant was convicted of making a false or misleading statement as to a service contrary to s 14 of the TDA.  On appeal, however, it was held, by Goff LJ, that "nowhere in s 14 is there specified, as one of the relevant matters, the price at which the services, accommodation or facilities are provided."  Mann J said: "I share my Lord's surprise that s 14 does not comprehend statements as to price in relation to services, accommodation and facilities.  Plainly it does not."

Reg 5(4) includes, as matters within the ambit of "misleading actions", "(e) the nature of the sales process", "(g) the price or the manner in which the price is calculated" and "(h) the existence of a specific price advantage."  Reg 6(4) includes, as "material information" relating to an invitation to purchase which may be a "misleading omission", "(d) either (i) the price, including any taxes; or (ii) where the nature of the product is such that the price cannot reasonably be calculated in advance, the manner in which the price is calculated"; "(e)" which covers, all additional freight, delivery or postal charges or, if they cannot be calculated in advance, the fact that they may be payable; and "(f)" which includes arrangements for payment where they depart from the requirements of professional diligence.

The now repealed s 25 CPA, provided for a code of practice to be made giving practical guidance on the requirements of s 20 thereof.  A contravention of such a code did not of itself give rise to any criminal liability, but could be relied on in a prosecution under s 20, either to establish that an offence had been committed or to show that it had not.  Codes were made under the Consumer Protection (Code of Practice for Traders on Price Indications) Approval Order 1988 and, subsequently, 2005 ("Codes").  Unlike the CPA, the CPUTR does not provide for the making of a code of practice.  Undeterred, the BERR has published its "Pricing Practices Guide: Guidance for traders on good practice in giving information about prices – May 2008" ("Guide").  The introduction to the Guide, which very much reflects the former Codes, rightly recognises that "it has of itself no mandatory force" and that "adherence to these recommendations will not of itself ensure that any act or omission is not in breach of [the CPUTR]".  Somewhat excessively, however, the Guide also says that its recommendations "in some respects probably go beyond the minimum required to avoid breaching the Regulations".  That statement may prove to be something of a gift to defence lawyers.  The former Codes spanned almost 20 years during which time many of their key provisions became known to the "average consumer" even if such consumers are not aware of the origin of them.  The reasonably observant consumer cannot have missed seeing shop notices, when traders have reduced the price of an item, indicating what the previous price or prices were.  They may well have also seen notices referring to the former price having been charged for a continuous period of 28 days within the previous 6 months.  The reasonable consumer will always expect that an honest trader will give the last price as the price that has been discounted.  Although these former features of the Codes are not expressly required by the CPUTR, they do now represent, as the combined result of their longevity and the fact that they are reproduced in the Guide, the standard of honest bona fide trading legitimately expected by the average consumer.  That would have been far more easy to establish had the Guide not undermined its own authority as a "standard" by stating that it is "probably" excessive in "some respects" which it has not identified.

Fortunately the erroneous and misleading references to what the trader may "honestly believe", which appeared in paragraphs 1.2.6 and 1.2.7 of the draft version of the Guide, have been replaced by references to what the trader might "reasonably expect".

In addition to potential offences being committed in relation to misleading price indications under regs 8 to 10, reg 12 and para 20 of Schedule 1 make it an automatic offence for a trader to engage in the commercial practice of: "Describing a product as 'gratis', 'free', 'without charge' or similar if the consumer has to pay anything other than the unavoidable cost of responding to the commercial practice and collecting or paying for delivery of the item".  This provision is taken word for word from the UCPD and so referring back to the UCPD does not help with its interpretation.  As with some other provisions in the CPUTR the original wording has been followed with little apparent thought as to its meaning.  Para 20 starts off referring to "a product" (which is defined in reg 2 as meaning "any goods or service and includes immovable property, rights and obligations") but it ends by referring to "the item".  From para 20's construction it is not possible to construe "the item" as being anything other than the same "product" which has been described as "free" (or in similar terms).  One does not, however, tend to think of a "service" as an "item" and so the use of the word "item", which it must be assumed was used intentionally, immediately raises the question of whether para 20 applies to services or, notwithstanding the wide definition of "product", only to goods.  There is only one other instance where the word "item" is used in the body of the CPUTR and that is in the "bait and switch" provision in para 6(a) of Schedule 1.  The context in which it is used there, namely: "refusing to show the advertised item to consumers" strongly, if not conclusively, suggests that an "item" cannot be a service.  Were a service to be described as "free", but subsequently charged for, a similar situation could arise as that in Newell v Taylor, ante.  If it is held, in due course, that a service cannot be an "item" then prosecutions in relation to misrepresented "free" services will have to lie under regs 8, 9 or 10.  The dishonoured offer of "free" goods with a service, however, should, in any event, be caught by para 20.

Whereas the meaning of "item" does not appear to have been addressed, there has been debate as to whether or not para 20 effectively bans the commercial practice of "buy one, get one free" (or "BOGOF" as it has rather unattractively become known).  In a buy one get one free situation, one of the two items is described as free but it cannot be obtained without paying the full price for the other item.  It arguably follows that the consumer does have to pay something otherwise than for "the unavoidable cost of responding to the commercial practice and collecting or paying for delivery of the item".  This interpretation would, however, mean that "buy one, get one free" offers would be banned notwithstanding that no one can reasonably be mislead by them.  That consideration has clearly influenced the interpretation of para 20 indicated by Parliament.  In recommending the CPUTR for approval by the House of Lords on 23rd April 2008, Lord Tunnicliffe said: "I agree these are well established marketing practices in the UK and not in themselves misleading.  We do not believe that the specific prohibited practice relating to the use of the description "free" will prevent the use of the word "free" in these cases.  This is because the unavoidable cost of responding to the commercial practice is the cost of buying the product - the one item in the case of "buy one get one free" or, say, the magazine with which the free gift comes."  On one, and perhaps the most obvious, reading of para 20 it is absurd to conclude that charging for one of the two items is "unavoidable".  A "commercial practice" includes the advertising or promotion of a product.  Such promotion can, and often is, conducted by giving away products which are truly "free" in that the consumer has to pay absolutely nothing to obtain them.  It is, however, possible to read the words "the commercial practice", in para 20, as referable to the specific commercial practice in which the trader has chosen to use the word free.  Read in that way, a commercial practice that requires the purchase of one item before another is given away does make the purchase, in contractual terms, "unavoidable".  Given that there is an ambiguity in the meaning of para 20 it would be open to the courts, in due course, to seek clarification as to Parliament's intent from Hansard (see Pepper v Hart [1993] AC 593).  Hansard clearly indicates, through the words of Lord Tunnicliffe, that the representation "buy one get one free" is not, in itself, a breach of para 20.  This is consistent with the "Guidance on the UK implementation of the Unfair Commercial Practices Directive" of March 2007, published by the BERR and OFT which gave the following example as a breach of para 20: "A trader advertises a 'free' gift.  He then tells consumers that in order to receive their 'free' gift they need to pay an extra fee" (emphasis added). 

[As the CPUTR were intended to give effect to the UK's obligations under the UCPD, those obligations, per Lord Oliver of Aylmerton in Litster v Forth Dry Dock and Engineering Co Ltd [1990] AC 546, "are to be ascertained not only from the wording of the ... Directive but from the interpretation placed upon it by the European Court of Justice at Luxembourg - such a purposive construction will be applied even though, perhaps, it may involve some departure from the strict and literal application of the words which the legislature has elected to use."  It follows that, in practical terms, looking at Hansard for Parliament's intended meaning of the CPUTR is of little value since Parliament is effectively presumed to have intended it to have the meaning the ECJ gives to the UCPD.  Article 288 of the Treaty on the Functioning of the European Union (previously article 189 of the Treaty establishing the European Economic Community) states that: "A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods."

In Purely Creative Ltd and others v Office of Fair Trading [2012] EUECJ C-428/11, the ECJ held that para 31 of Schedule 1 should be given a literal interpretation, principally because it is in a list of those commercial practices which are in all circumstances to be regarded as unfair.  That reasoning clearly extends to all the paragraphs of Schedule 1.  However, in relation to paras 1 to 23, which fall under the heading "Misleading commercial practices", the ECJ's judgment does leave it open slightly for the consideration of whether any particular practice is in fact misleading.  Read entirely literally, para 20 would outlaw the practice of a trader declaring that a CD was "free" with a copy of its newspaper.  Such a CD would not be literally "free" because a consumer would have to pay for the newspaper in order to obtain it.  Given, however, that an average consumer would not be at all misled, it would seem unlikely that the ECJ would consider the practice to fall under para 20.  BOGOF offers are likely to escape for the same reason.]

Aggressive commercial practices

The prohibition, and criminalisation of aggressive commercial practices is entirely new and does not have an equivalent in the TDA or CPA.  Reg 11 of the CPUTR provides that a trader is guilty of an offence if he engages in a commercial practice which is aggressive, that is, "in its factual context, taking account of all of its features and circumstances (a) it significantly impairs or is likely significantly to impair the average consumer's freedom of choice or conduct in relation to the product concerned through the use of harassment, coercion or undue influence; and (b) it causes or is likely to cause him to take a transactional decision …".  "In determining whether a commercial practice uses harassment, coercion or undue influence account shall be taken of: (a) its timing, location, nature or persistence; (b) the use of threatening or abusive language or behaviour; (c) the exploitation by the trader of any specific misfortune or circumstance of such gravity as to impair the consumer's judgment, of which he is aware, to influence the consumer's decision with regard to the product; (d) any onerous or disproportionate non-contractual barrier imposed by the trader where a consumer wishes to exercise rights under the contract, including rights to terminate a contract or to switch to another product or another trader; and (e) any threat to take any action which cannot legally be taken."  "Coercion" is defined as including "the use of physical force" and "undue influence" means "exploiting a position of power in relation to the consumer so as to apply pressure, even without using or threatening to use physical force, in a way which significantly limits the consumer's ability to make an informed decision."  The inclusion of practices which exploit a position of power held "in relation to" a consumer means that a trader can offend against reg 11 even if he is not abusive or threatening in any physical sense.  Hence a mechanic who has carried out more than the agreed work on a consumer's car may offend against reg 11 if he refuses to release the car from his garage until the consumer has paid for the unauthorised work.

In addition to the new offences created by reg 11, reg 12 makes it an offence for a trader to engage in the commercial practices set out in Schedule 1, paras 12, 24, 25 and 26 which, in ordinary parlance, might also be described as aggressive practices whether or not they come within the meaning of "aggressive commercial practices" given by reg 7. 

[It was pointed out by the ECJ in Purely Creative Ltd and others v Office of Fair Trading [2012] EUECJ C-428/11, that the UCPD version of paras 1 to 23 appear under the heading "Misleading commercial practices" and that the UCPD version of paras 24 to 31 appear under the heading "Aggressive commercial practices".  Although those headings do not appear in Schedule 1 to the CPUTR, they must be read in.  Para 12 therefore falls under the heading of "misleading" rather than "aggressive" but the reality is that it contains both those elements.]

Para 12 bans "making a materially inaccurate claim concerning the nature and extent of the risk to the personal security of the consumer or his family if the consumer does not purchase the product."  Para 24 prohibits "creating the impression that the consumer cannot leave the premises until a contract is formed."  The use of the words "the premises", in the absence of any context, raises the question; "what premises?"  As this provision does not confine "the premises" to either "the trader's premises" or to "the consumer's premises" and as "premises" is interpreted in reg 2 as including "any place and any stall, vehicle, ship or aircraft", the prohibition must apply to any place where the trader is promoting a product including business premises or the consumer's own home.  This provision may help to combat the pressurised selling of time shares.  Para 25 bans personal visits to the consumer's home "ignoring the consumer's request to leave or not to return, except in circumstances and to the extent justified to enforce a contractual obligation."  Para 26 prohibits "making persistent and unwanted solicitations by telephone, fax, e-mail or other remote media except in circumstances and to the extent justified to enforce a contractual obligation". Clearly a "contractual obligation", in paras 25 and 26, is one that already exists and cannot include one that the trader wants the consumer to enter into.

The new regime against aggressive commercial practices, including the quasi-aggressive commercial practices in Schedule 1, is quite comprehensive and will, hopefully, lead to little need for judicial interpretation.  There will, however, always be grey areas where one court might legitimately regard certain behaviour as, for example, "abusive" whereas another court might equally legitimately regard it as falling short of "abusive".  Even if a trader's behaviour is found to be "abusive" or otherwise constituting "harassment, coercion or undue influence" different courts may take opposing views on whether borderline behaviour was likely to have the necessary influence on an average consumer to make it unlawful.  In this regard it is to be hoped that courts will not be swayed by the existing culture which may exist in their particular area.  If a particular level of aggression is currently commonplace it should not equate to it being acceptable.

As noted, ante, the first limb of an offence under reg 11 requires that a commercial practice "significantly impairs", (or is likely to) the average consumer's "freedom of choice or conduct" through the use of harassment coercion or undue influence.  The definition of "undue influence" in reg 7(3), however, uses the words "significantly limits" the consumer's "ability to make an informed decision".  One can see that "freedom of choice or conduct in relation to the product is wider than "the consumers ability to make an informed decision" as the former would include the consumer's freedom to simply get up and leave.  It is not immediately apparent, however, whether there is any real contextual difference between an "impairment" and a "limitation". 

It is evident that the aggressive commercial practices provisions will do much to combat the insidious practice of "cold calling" or "doorstep selling" where the trader uses his unrequested presence on the consumer's own property as an aid to securing a sale.  Suppose, however, that a trader deliberately employs only salespeople who are burly and of menacing appearance and who, as a matter of course, are loud and use offensive language and gestures or mannerisms.  Although mens rea is not an element of an offence under reg 11, the question will arise in due course as to whether the appearance, or certain natural traits within the character, of some salespeople which may have an aggressive effect on average consumers or particular groups of average consumers, can be properly categorised as "harassment, coercion or undue influence."  Regrettably, such inherent or passive aggression, is not expressly included.  The list of those factors to be taken into account when determining whether a commercial practice uses harassment, coercion or undue influence is not, however, exhaustive.  Furthermore there is no requirement for "threatening or abusive language or behaviour" to be deliberately so.  In addition, as "coercion" is said to "include the use of force" it must also include situations where force is not used and its breadth of meaning is not restricted to deliberate intimidation.

The fact that "a traders exploitation of a consumer's significant misfortune" is included in the list of matters to be taken into account under reg11 is particularly welcome, from a humanitarian point of view since, although the trader may see his practice as mere opportunism, it can be an extremely pernicious activity.  Activities such as selling expensive coffins or flowers to the bereaved on the basis that cheaper ones would not indicate an appropriate degree of love for the deceased or following in the wake of a torrential gale in search of the victims of fallen trees or flooding may thus be curtailed.

The future of disclaimers

Disclaimers are most closely associated with offences under the TDA but, as Widgery LCJ said in Waltham Forest London Borough Council v TG Wheatley (Central Garage) Ltd [1978] RTR 157, "the disclaimer notice is a creation of the courts.  It is not dealt with in the [TDA] at all".  Likewise, there is no express reference to disclaimers in the CPUTR but, just as the common law doctrine of disclaimer grew up with, and was applied to, the TDA there is no reason to suppose that it will not have a similar application, albeit with some necessary variation, to the CPUTR.  The fact that the CPUTR derives from a European Directive does not militate against the concept of disclaimers applying to the CPUTR.  In the Estée Lauder case, ante, it was held that "in order to determine whether a particular description … is misleading, it is necessary to take into account the presumed expectations of an average consumer who is reasonably well informed and reasonably observant and circumspect" and that, in order to apply that test to the facts of that case, one of the things to be determined was "whether the instructions for the use of the product are in themselves sufficient to make it quite clear that its effects are short-lived, thus neutralising any conclusion to the contrary that might be derived from the word 'lifting'."  This concept of the words in a description being "neutralised" by the words of an associated statement is exceedingly close to what Widgery LCJ characterised as the doctrine of "disclaimer".

In Norman v Bennett [1974] 3 All ER 351, Widgery LCJ, said: "This case raises, I think for the first time, a need for the court to think a little more deeply about the extent to which a false trade description can be disclaimed so as to prevent the supplier of the goods from committing a criminal offence.  Where a false trade description is attached to goods, its effect can be neutralised by an express disclaimer or contradiction of the message contained in the description.  To be effective any such disclaimer must be as bold, precise and compelling as the trade description itself and must be as effectively brought to the notice of any person to whom the goods may be supplied.  In other words, the disclaimer must equal the trade description in the extent to which it is likely to get home to anyone interested in receiving the goods.  To be effective as a defence to a charge under s 1(1)(b) [TDA] any such disclaimer must be made before the goods are supplied."

On a superficial level, all that is required to apply Widgery LCJ's doctrine ("the Widgery test") to the CPUTR is to substitute "commercial practice" for "trade description" and "product" for "goods".  That done, for a disclaimer to be effective it must be made before the average consumer takes, or is likely to take, a transactional decision.  Those familiar with the TDA will recall that Lawton LJ, sitting in the Court of Appeal in R v Hammertons Cars Ltd [1976] 1 WLR 1243, endorsed the doctrine of disclaimer and said that "common sense says that [disclaiming] evidence should be bold, precise and compelling."  That same common sense should also prevail for the purposes of the CPUTR.  Although the disclaimer defence has its origins in falsified odometer cases it applied equally to any trade description and was extended in, Smallshaw v PKC Associates Ltd (1995) 159 JP 730, to s 14 TDA so as to apply to services as well as goods.  There is therefore already precedent for the doctrine to apply to both goods and services, that is, to "products".

Common sense, in relation to the TDA, also dictated that a disclaimer could not be a defence to the trader who physically applied a false trade description to a product.  In Newman and Another v Hackney London Borough Council [1982] RTR 296, the defendants "applied a false trade description ... by deliberately winding back the odometer".  They submitted that there was no offence because an effective disclaimer sticker had been placed over the odometer.  Ormrod LJ took a dim view of the defendants' practice and was not prepared to accept that the disclaimer doctrine was applicable to applying offences in the same way as it was to supplying offences: "The offence is committed when the false trade description is applied to the vehicle or goods and that is at the time when the odometer reading is altered to read a meaningful figure like 21,000 miles.  In that light, a disclaimer has no application at all. ... There can be no conceivable honest motive in re-setting the odometer and then sticking a sticker on it to say that the figures on the odometer are not guaranteed, or however it was put".  The inapplicability of the disclaimer doctrine to applying offences was confirmed by the Court of Appeal in R v Southwood [1987] 3 All ER 556, where Lane LCJ said: "If a dealer falsifies the mileage reading on a car which is offered for sale, he applies a false trade description to goods in the course of a trade, and so he commits an offence under s 1(1)(a).  He would have no escape under the provisions of s 24.  It seems somewhat illogical to allow him to use a so-called 'disclaimer' to avoid conviction.  The 'disclaimer' ... would be saying: 'This is a false trade description.  I assert that it is a false trade description, and because I assert that it is a false trade description it ceases to be a false trade description applied to goods, and consequently I am not guilty of a contravention of s 1(1)(a).'  The assertion does not cause the description to be any less false than it was originally, nor does it cause the description to cease to be applied to the car.  It seems that on the strict wording of the Act, therefore, the so called 'disclaimer' provides no defence to a person charged under s 1 (1)(a)".  However, different considerations apply under the CPUTR.  The notion that a trader could not disclaim his own false trade description was all very well in relation to legislation where the offence was complete at the point that such description was applied, but before offences contrary to regs 8 – 10 are complete their causation limbs need to be satisfied regardless of how knowingly or dishonestly the falsity in the commercial practice may have been created.  Hence, any supplementary information that is clearly brought to the attention of the average consumer, before he can make a transactional decision, is relevant to how such consumer is likely to process the information given by the commercial practice itself.  Nonetheless, if a trader deliberately falsifies an odometer reading he will not be saved from committing an offence if the disclaiming information does not truly neutralise its meaning in terms of the ability of the consumer to make an informed decision.  To turn back an odometer reading from 80,000 miles to 8,000 miles and to say it "cannot be relied upon" would not be a sufficient disclaimer as the false reading is still likely to influence a significant proportion of consumers.  Indeed, such a disclaimer could mislead by omission and would itself be a commercial practice giving rise to an offence under reg 10.  The concept of a disclaimer itself founding an offence would not be new.  Donaldson LJ suggested in Corfield v Starr [1981] RTR 380, that a disclaimer could be a false trade description contrary to the TDA.

The due diligence defence provided by s 24 TDA has been replicated in reg 17 of the CPUTR and so it is necessary to consider, for the purposes of offences under regs 9 and 10, the interrelationship between disclaimers and the statutory defence.  The distinction between disclaimers and the statutory due diligence defence was clarified by Donaldson LJ in Crook v Howells Garages (Newport) Ltd [1980] RTR 434, where he said of the disclaimer:  "In a sense perhaps it is not a defence at all.  If a disclaimer is made no offence is committed because a false trade description is not applied.  But it is very difficult to see how, in the absence of that precaution being taken with a view to avoiding the commission of the offence, it is possible to rely on section 24(1)".  The trader who, in the example ante, reduces the recorded mileage of a vehicle from 80,000 miles to 8,000 miles and seeks to disclaim by merely saying that the mileage "cannot be relied upon" should not be able to rely on a due diligence defence since a reasonable precaution would have been to declare the true mileage.

A further feature of, or variation to, the disclaimer as it applied to the TDA was highlighted in R v Bull (1996) 160 JP 240.  There, a car dealer had innocently copied the mileage from a car's odometer onto the sales invoice in a box marked "Odometer Reading".  Immediately after that figure there was an asterix and, immediately below that, a further asterix with the pre-printed words: "Trade Descriptions Act 1968.  We have been unable to confirm the mileage recorded on this odometer and therefore it must be considered incorrect".  Waterhouse J, delivering the judgment of the Court of Appeal, said: "There was an applying of a trade description to the invoice … [But] the essential question is whether or not the qualification to the figure applied by the appellant to the invoice in this case is properly to be regarded as part of the trade description or is to be regarded as a 'mere disclaimer'."  If the qualifying words were a "mere" disclaimer they would, in the light of R v Southwood, ante, have been ineffective because a trader could not disclaim a description he had himself applied.  Although Mr Bull had not applied the description to the car by means of the odometer, he had it was argued applied it by means of the invoice.  The Court concluded, however, that the qualifying words indicating that the odometer reading was wrong did not constitute a "mere disclaimer", but amounted to a qualification of the description so integral to it that it was never false in the first place.  A "Bull" disclaimer is therefore not simply more than a "mere" disclaimer but arguably not a disclaimer at all.  Since its proximity to the trade description is so close that it must be regarded as an integral part of the description, and saves the description from being false, there is no false description to disclaim.  One can see that a Bull type of disclaimer, which is an integral part of a commercial practice, could prevent such a practice from being false or misleading under the CPUTR.

Thus far it has been postulated that the doctrine of disclaimer, as it applied to the TDA, can have an application to the CPUTR.  It is now necessary to look a bit further at the extent of that application.  Neither the TDA nor the CPUTR made any express reference to disclaimers.  In relation to the TDA the only place where the use of disclaimers might be inferred from the legislation itself is in those provisions which looked at how a trade description was "likely" to be taken.  The CPUTR is riddled with "likely" provisions, most notably, in the causation limb of the offences created by regs 8, 9 and 10.  Even more compelling is the need to show causation in terms of the effect of the commercial practice on the average consumer.  Disclaimers have the inevitable potential to impact on the behaviour of the average consumer thereby preventing a commercial practice from causing a transactional decision to be made.

As already noted, the additional wording in the causation limb relating to reg 8 offences invites consideration of not just whether a breach of professional diligence causes the average consumer to take a transactional decision but whether the practice appreciably impaired his "ability" to do so.  It is not really possible to consider whether a consumer's ability was appreciably impaired by, for example, a false representation without taking account of other information which was readily available to the consumer.  It is also not possible to determine whether a commercial practice caused an average consumer to take a transactional decision without considering the overall context.  Hence, in relation to regs 8 – 10 it may be that information, for example, on the back of a label, if clear and readily accessible, might "neutralise" or "disclaim" false or misleading information on the front of the label.  It remains to be seen whether, in determining if neutralising information is sufficiently accessible so as to prevent it "appreciably" impairing the "average" consumer's ability to make an informed decision, or otherwise causing the consumer to take a transactional decision, the courts will adopt Widgery LCJ's requirement that the disclaimer must be as "bold, precise and compelling as the [commercial practise] itself and must be as effectively brought to the notice of [the average consumer]".  It will be seen that by building into the Widgery test, the required reference to the "average consumer" it becomes somewhat more favourable to traders.  It means that, in the example of a label with a false commercial practice on the front (such as the representation "oak") which has potentially neutralising information on the back (such as "oak veneer"), if a reasonably well informed, reasonably observant and circumspect consumer would be expected to refer to the back, and the neutralising information is as bold precise and compelling as the commercial practice on the front, there would be no offence.  Put another way, because of the disclaimer, the commercial practice was not likely to cause the average consumer to take a transactional decision.

In the case of a food or drink product, the "reasonably well informed, reasonably observant and circumspect" consumer would probably know that there must be information elsewhere on the label in the form of an ingredients list.  Currently, however, such information is very rarely as "bold" as the description of the product on the front of the label.  Adopting the Widgery test, even modified as suggested, would thus require manufacturers of food products to either give only accurate information on the front of their labels or to specifically direct consumers to qualifying information elsewhere on the label (in effect a "Bull disclaimer") or to increase the boldness of the ingredients list.  A significant proportion of consumers are able to go shopping and to read the prominent information given on product labels whereas, without the aid of spectacles, they cannot easily read the smaller print elsewhere on the labels.  The ability of such consumers to make an informed transactional decision is therefore appreciably impaired albeit not prevented.  Unless disclaimers are sufficiently bold, as well as precise and compelling, they cannot have the necessary impact on the "average consumer" as defined in the CUPTR.  There will also be cases where, although an average consumer would know he could find additional information on the label, it would not be reasonable for him to read it.  If, for example, the only information given on the front panel of a carton of drink was "freshly squeezed natural orange juice" the reasonable consumer would not expect to find anything in the ingredients list other than a reference to 100% orange juice.  In those circumstances, truthfully stating in a remote ingredients list, that the product contained 60% added water and only 40% orange juice ought not to suffice as a disclaimer and cannot be regarded as an honest market practice.  Furthermore, any potentially neutralising information, however bold precise and compelling it might be, must be effectively drawn to the attention of the consumer before he makes a transactional decision. 

It is, of course, entirely possible that the courts will say that the doctrine of disclaimer is a thing of the past and unnecessary or undesirable to apply to the CPUTR.  Disclaimers, however, whether expressed as such or not, will continue to be used and will have to be put in the balance in determining whether a commercial practice is likely to mislead or is likely to cause a transactional decision to be taken.  That cannot be done without looking at the impact of the disclaimer in terms of factors such as whether the offsetting information was as "bold, precise and compelling" as the false or misleading information.  There is a need for some form of test, to determine whether a disclaimer is effective, in order to ensure a degree of certainty to assist both those who label products and those who consume them.  Adopting the Widgery test would have the advantage of continuity of approach and hence fulfill the existing expectations of both traders and consumers.  It would also be consistent with the definition of "professional diligence" which is written in terms of the standard reasonably expected of traders.  Although the CPUTR is new, the standard has already been set.

As a result of the way in which regs 5 and 9 are drafted there will be some commercial practices, for example representations that give false information as to the commercial origin of a product, which cannot be disclaimed.  Hence, returning to the example of a trader selling fake Rolex watches; even the most bold, precise and compelling notice informing prospective purchasers that the watches are counterfeit will not neutralise the representation "Rolex" on the watch itself – it cannot alter the fact that the commercial practice "contains" false information.  Anyone taking the transactional decision to buy such a watch, knowing it is counterfeit, will do so as a result of the Rolex name and associated style and not for the quality of workmanship etc that the name implies.  As previously noted, the reg 9 offence of engaging in a commercial practice which contains false information, notwithstanding its classification as a type of "misleading action", does not require that anyone is misled or likely to be misled.  The causation limb is satisfied because the commercial practice is likely to cause a significant proportion of the group of average consumers to whom it is directed to take a transactional decision notwithstanding the disclaimer.

Disclaimers cannot logically be effective in relation to aggressive commercial practices.  The practice of forcing a consumer to sign a contract at gun point would be no less aggressive if the contract included a clause to say that it was signed voluntarily.  The scope for disclaimers to have any effect in relation to offences under reg 12 and Schedule 1 is greatly reduced by the lack of causation limb for such offences.

Supplementary offence provisions

The supplementary offence and enforcement provisions in the CPUTR owe much to the TDA.  Reg 15, which deals with the personal liability of company officers, when an offence has been committed by their corporate body, is substantially the same as s 20 TDA save that liability attaches to an officer where the corporation's offence is proved to have been committed with the "consent or connivance" of an officer of the body, or to be attributable to any neglect on his part; the TDA equivalent referred to "consent and connivance".

Reg 16 is headed by the words "offences due to the default of another person" but provides for a person to be guilty of an offence where its commission was due to the act or default of another.  The omission of the words "the act" in the heading does not of course mean that Phillimore LJ in the Re Woking case, ante, was right about such headings being inserted by "irresponsible persons".  The text of reg 16 reflects s 23 TDA and builds in the decision in Olgiersson v Kitching [1986] 1 WLR 304, that a private individual can commit an offence under the "act or default", or "by-pass" provision as it was often known.  Reg 23 TDA was commonly used to by-pass a prosecution of the supplier of goods and to target the person who was really at fault.  Thus, where a shop owner sold a product on a certain day which bore a false description applied by the manufacture of the product, even if the owner of the shop was not charged with the primary offence, the manufacturer could be charged that, on that day, the offence of supplying the falsely described goods was due to his act or default.  This enabled the manufacturer to be prosecuted, effectively for applying a false trade description, without any evidence as to when the description was physically applied to the product.  Alleging an offence based on the time of supply of goods, rather than at the time of the actual application of the description to them, meant that prosecutions which might otherwise have been out of time could proceed.  In the same situation under the CPUTR there would be no need to rely on the reg 16 by-pass provision since it would be unnecessary to rely on a supply of goods by the owner of the shop to prosecute the manufacturer of the product.  On the day a shop sells a falsely labelled product the manufacturer also directly engages in a commercial practice providing false information which is likely to cause a transactional decision to be made.  This is because a representation or advertisement continues to be made whenever it is read (see R v Avro plc (1993) 157 JP 759 CA and R v Thomson Holidays Ltd [1974] 1 QB 592).  Reg 16 also expressly provides that the primary offender commits an offence even if he might have had a statutory defence.  The secondary offender, that is the person guilty by virtue of reg 16, may still seek to rely on his own statutory defence).  Reg 16 does not apply to reg 8, presumably because such offences are committed knowingly or recklessly and therefore cannot be due to the act or default of another.

Reg 17 provides a "due diligence defence" which very closely follows the familiar wording of the defence in s 24 TDA.  The defendant therefore has to satisfy the two limbs of, firstly, proving that the commission of the offence was due to a mistake; reliance on information supplied to him by another person; the act or default of another person; an accident; or another cause beyond his control and, secondly, "that he took all reasonable precautions and exercised all due diligence to avoid the commission of such an offence by himself or any person under his control."  Retaining the wording used in s 24 TDA means that the wealth of judicial precedent, including that in the seminal case of Tesco Supermarkets Ltd v Nattrass [1972] AC 153, is not lost.  One important respect in which s 24 TDA differed, and reg 17 CPUTR now differs, from the due diligence defence in other legislation was in the requirement imposed on the accused to prove not simply that he had taken the relevant precautions and exercised all the due diligence which could be expected to avoid the commission of the offence with which he was charged, but so as to avoid the commission of "such an offence", that is, all offences of the same nature.  A precaution or act of diligence may have been reasonable even if it would not have prevented the actual offence charged (see Barker v Hargreaves [1981] RTR 197).  The s 24 TDA defence was held by the House of Lords, in Wings Ltd v Ellis [1985] 1 AC 272, to apply to all offences under the TDA, including s 14 notwithstanding its mens rea element requiring proof of knowledge or recklessness.  In contrast, the reg 17 defence does not apply to offences under reg 8.  Reg 17 also takes from s 24 TDA the requirement that, unless leave of the court is given, the prosecutor must be served with notice of intent to rely on information supplied by another or on the act or default of another person.  It is incidentally gratifying, in the interests of protecting the full meaning of words, that the word "leave" has been retained (although probably inadvertently) and has not been replaced by "permission" as it has elsewhere, such as in relation to judicial review.  In McGuire v Sittingbourne Co-operative Society Ltd (1976) 140 JP 306, it was held, in relation to s 24 TDA, that the onus was on the defendant to investigate how and by whom the act or default relied on was committed and to give that information in the notice.  In Kilhey Court Hotels Ltd v Wigan MBC [2004] EWHC Admin 2890, in relation to the similar provision in the Food Safety Act 1990, it was held that leave of the court was required to rely on the statutory defence, without giving the required notice, even if the act or default of another only becomes apparent at the trial.

Reg 18 provides a second statutory defence.  It applies to protect those whose business it is to publish, or arrange for the publication, of advertisements when they had no reason to suspect that publication would be an offence.

The defences provided by regs 17 and 18 only have to be proved by the defendant on the balance of probabilities (see R v Carr-Briant [1943] 1 KB 607 and Garrett v Boots The Chemists Ltd (1980) 88 ITSA MR 238).  The burden of proof remains with the defendant notwithstanding the presumption of innocence in article 6(2) of the European Convention on Human Rights.  As Lord Nicholls said in R v Johnstone [2003] 1 WLR 1736, in relation to the statutory defence in s 92(5) of the Trade Marks Act 1994: "I entertain no doubt that, unless this interpretation is incompatible with article 6(2) of the Convention, s 92(5) should be interpreted as imposing on the accused person the burden of proving the relevant facts on the balance of probability.  Unless he proves these facts he does not make good the defence provided by s 92(5)".

Enforcement provisions

The enforcement provisions of the CPUTR largely replicate those in the TDA.  Reg 19 gives enforcement authorities the power for them, or their authorised officers, to make test purchases.  The powers of entry, without a warrant in reg 21 and with a warrant in reg 22, derive from s 28 TDA but now include a power for officers to break open containers to seize documents as well as goods.  An officer must now produce evidence of his identity and authority to the occupier, if there is one, "whether he is asked for it or not".  Seized goods or documents may not now be detained for more than 3 months or, if reasonably required for enforcement, for longer than so required.

As was provided by s 29 TDA, so too reg 23 CPUTR provides that the obstruction of an authorised officer is a summary offence but with the maximum penalty increased from a fine at level 3 to level 5.  If, however, a person knowingly gives false information it attracts the same penalties as in reg 13, ante.

Reg 14 sets out the time limits within which prosecutions must be commenced in much the same terms as did s 19 of the TDA.  Either way matters must commence within the earlier of three years from the commission of the offence or one year from its discovery by the prosecutor.  It should be noted that in R (Donnachie) v Cardiff Magistrates' Court [2007] EWHC 1846 (Admin), in relation to the TDA, it was held that "the prosecutor" is the prosecuting authority", and not the person who lays the information.  Summary only informations must be laid within twelve months of the commission of the offence.  The legislature has introduced some new words, with no apparent purpose, such that the references to "three years", "one year" and "twelve months" are prefixed by "the period of".  One has to wonder what a number of years or months can be if not a period.  More constructively, there is a new paragraph providing for a certificate, which is signed by or on behalf of the prosecutor and which states the date on which the offence was discovered by him, to be conclusive evidence of its contents.

The Business Protection from Misleading Marketing Regulations 2008

The Business Protection from Misleading Marketing Regulations 2008 ("BPMMR"), which came into force contemporaneously with the CPUTR, seek to implement, within the law of the United Kingdom, the requirements of the Misleading and Comparative Advertising Directive 2006/114/EC ("MCAD").  The MCAD replaced the directive which gave rise to the Control of Misleading Advertising Regulations 1988 (CMAR).  The CMAR are repealed by the CPUTR and are superseded by the BPMMR.  The BPMMR are much more powerful than were the CMAR as they have built in criminal enforcement provisions.  Under the CMAR recourse was by way of complaint to the OFT or to the Office of Communications and the former had the power to seek injunctive relief.

It will be recalled that "consumer", for the purposes of the CPUTR, does not include a trader unless he is acting outside of his business.  It falls to the BPMMR to provide the missing protection to traders, when acting as traders, from the misleading representations of other traders.  As the name of the MCAD suggests, but the name of the BPMMR omits, these pieces of legislation are about advertising.  "Advertising", however, is very broadly defined as meaning "any form of representation which is made in connection with a trade, business, craft or profession in order to promote the supply or transfer of a product".  "Product" has the same meaning as in the CPUTR and hence includes both goods and services.

Reg 6 makes it an offence for a trader to engage in advertising which is misleading under reg 3.  Reg 3(1) prohibits misleading advertising and reg 3(2) provides that "advertising is misleading which (a) in any way, including its presentation, deceives or is likely to deceive the traders to whom it is addressed or whom it reaches; and, by reason of its deceptive nature, is likely to affect their economic behaviour; or (b) for those reasons, injures or is likely to injure a competitor."  The semicolon after the word "reaches" appears to have been inadvertently retained from the previous draft in which "(b)" followed the word "and".  Reg 3(3) provides that "in determining whether advertising is misleading, account shall be taken of all its features, and in particular of any information it contains concerning" a range of listed matters including the characteristics, price and nature of the product.  The examples given in reg 3(4) as to what is included in the phrase "characteristics of the product" is very similar, save for one quirky difference, to the examples of "main characteristics of the product" given in reg 5(5) of the CPUTR.  In each case the list s taken directly from the respective mother Directives.  The list in the UCPD includes "... fitness for purpose, usage, quantity, specification, geographical or commercial origin ...".  The respective list in the MCAD includes "... fitness for purpose, uses, quantity, specification, geographical or commercial origin ..."  The difference between the words "usage" in the UCPD and "uses" is very significant in terms of meaning but the similarity in the words themselves, particularly when used between other identical words, raises the question of whether both of those words were intended to read either "usage" or "uses".  The list of "main characteristics of the product" in the CPUTR does not include "history" which was in the list of trade descriptions in s 2 of the TDA and founded many a prosecution under that Act relating to reduced mileage readings on vehicles odometers.  A vehicles recorded mileage is as much an indication of a vehicles "usage" as it is its "history" but it cannot come within the natural meaning of the word "uses".  Whereas "usage" is wide enough to cover both the history of use of a product and the types of use to which the product can be put, the word "uses" only covers the latter description.  Thus, where a trader clocks a car and sells it to another trader a less obvious type of "characteristic" of the product such as "fitness for purpose" needs to be selected.  A saving grace is that the respective lists of characteristics in the CPUTR and BPMMR are non-inclusive and hence "history" may still be regarded as a characteristic of a product whether as an indication of fitness for purpose or otherwise.

The penalty for offences reflects that in the CPUTR where there are also similar statutory defence and by-pass provisions.

The significance of misleading advertising being "prohibited" by the BPMMR as well as grounding an offence is that reg 15 of the BPMMR enables an enforcement authority to apply for an injunction against any person who appears to be in breach of regs 3 to 5.  This therefore provides a similar type of civil action as that available under the CPUTR where it is effected by means of the EA.  Reg 4 effectively prohibits certain kinds of comparative advertising and reg 5 prohibits such comparative advertising or misleading advertising from being promoted in a code of conduct.

Although the BPMMR clearly applies to commercial transactions as between traders and the CPUTR applies to commercial transactions as between trader and consumer, a trader who only supplies products to other traders can still offend under the CPUTR.  Take the example of the trader who "clocks" a car and then sells it to another trader.  The first trader knows that the second trader will sell the car on to a consumer.  He has therefore engaged in a "commercial practice" within the meaning of the CPUTR because the representation he has made as to the car's true mileage is "directly connected with the promotion, sale or supply of a product to or from consumers".  It does not matter that he has not dealt directly with consumers.  For the same reason, the manufacturer of products bearing labels which in due course will be seen by the general public on supermarket shelves, is caught by the CPUTR even if he only ever sells his products to wholesalers.

The legislative drafting

Although a number of adverse comments have been made in this article about the cumbersome and tautologous drafting of the CPUTR it will hopefully not adversely affect their overall meaning and effectiveness.  A bit of editing, particularly of the repetition could have made the CPUTR more succinct and hence ultimately easier to apply.  If there is one thing which courts do not like about prosecutions brought by regulatory enforcement authorities it is their tendency to lay excessively long informations.  This is often not the fault of the authority but results from the longwinded drafting of the legislation being enforced.  If some of the legislative chaff is blown away it will make for more succinct and meaningful charges.  It is evident that much of the drafting difficulties stem from trying to remain true to the words used in a directive written by and for many tongues and to meet the needs of diverse cultures. 

When, in H P Bulmer Ltd v J Bollinger SA and others [1974] Ch 401; [1974] 2 All ER 1226, Lord Denning MR considered the impact on English law of the European Economic Community Treaty, he said: "The Treaty does not touch any of the matters which concern solely the mainland of England and the people in it.  These are still governed by English law.  They are not affected by the Treaty.  But when we come to matters with a European element, the Treaty is like an incoming tide.  It flows into the estuaries and up the rivers.  It cannot be held back.  Parliament [through s 2(1) of the European Communities Act 1972] has decreed that the Treaty is henceforward to be part of our law.  It is equal in force to any statute."  In 1990, having retired from the bench some 8 years earlier, Lord Denning said: "No longer is European law an incoming tide flowing up the estuaries of England.  It is now like a tidal wave bringing down our sea walls and flowing inland over our fields and houses to the dismay of all." 

Although the tsunami of European law has now engulfed and gutted the TDA, leaving but its disembowelled carcass on the statute books, much of what was swept away has washed up on the beaches of the CPUTR and has enriched its soul.  The TDA will not be forgotten.

VICTOR SMITH

 

Postscript: misleading actions revisited

The author of this article has commented adversely about the use of inconsistent language in the various provisions of the CPUTR.  In respect of at least one of those inconsistencies that criticism has to be partially withdrawn as, on reflection, it is apparent that there is good reason for the difference in wording.  It has been noted above that "in respect of misleading actions, reg 5(2) simply refers to commercial practices which cause a transactional decision.  In relation to misleading omissions, however, reg 6(1) provides for commercial practices which 'as a result' cause a transactional decision and reg 7(1) refers to aggressive commercial practices which 'thereby' cause a transactional decision."  It is now acknowledged that the absence of words such as "as a result" or "thereby" in reg 5(2) is significant and impacts on the interpretation of that provision, although the distinction between "as a result" and "thereby" remains unclear.

Misleading actions, as set out in reg 5(2), give rise to offences under reg 9 when engaged in by a trader.  A commercial practice is a misleading action "(a) if it [i.e. the commercial practice] contains false information and is therefore untruthful in relation to any of the matters in paragraph (4) or if it or its overall presentation in any way deceives or is likely to deceive the average consumer in relation to any of the matters in that paragraph, even if the information is factually correct; and (b) it causes or is likely to cause the average consumer to take a transactional decision ..."  It will be seen that the word "it" as used in the above refers, not to the false (or deceptive) information, but to the commercial practice within which it is contained.  It follows that there is no requirement that the false information etc must be likely to cause a transactional decision to be made.  A trader can commit an offence under reg 9 in relation to, for example, representations made in an advertisement even if the false information itself would not have caused an average consumer to take a transactional decision.  It is sufficient if the commercial practice "caused" the transactional decision even if the false information, taken alone, would not have done.

The above interpretation is fortified by the fact that in reg 5(2), unlike in reg 6(1), the words "it causes" are not prefixed by the words "as a result".  Had the words "as a result" or the word "thereby" been used it would have meant that it had to be the false information which caused the transactional decision to be made.  In the absence of such words, it would appear to have been the legislator's intent that the false information (or deceptive presentation) itself does not need to be the cause of a transactional decision before an action becomes a misleading and offending one.

Consider then a commercial practice which consists of an advertisement claiming that a product has, say, 10 attributes.  Only one of those attributes is false and, of itself, would not be likely to cause a transactional decision to be made.  So long as any of the other 9 attributes either alone or taken together with one or more of the other attributes would have been likely to cause a transactional decision to be made it is sufficient.  

The drafting of reg 5(2) means that, in many cases, proving the causation limb will be little more than a formality and further equates "false information" offences with those of applying a false trade description under the former s 1 of the TDA where it was irrelevant whether anyone was influenced by the falsity or caused to make a transactional decision.

It should be noted that the above analysis assumes that the words of the CPUTR will be interpreted according to the literal rule.  As pointed out in Office of Fair Trading v Purely Creative Ltd, as the CPUTR were made to give effect to the UCPD, they must be subjected to a purposive interpretation.  Such an interpretation could give a different result.  Bearing in mind, however, that a main purpose of the UCPD is to confer upon consumers a high level of protection, there seems to be no reason why the courts should not give the words of reg 5(2) there ordinary meaning.  Furthermore, in the Office of Fair Trading v Purely Creative Ltd case, Briggs J said: "At first sight it might appear from the structure of regs 5 and 6 that, for the purposes of applying the causation test, misleading acts require to be assessed separately from misleading omissions.  In my judgment that structure did not intentionally impose such an impracticable barrier, in particular because the causation test is the same under each regulation.  I consider that the combined effect of all relevant misleading acts and omissions must first be ascertained, and then subjected to the test whether, taken in the aggregate, it would probably cause the average consumer to take a transactional decision which he would not otherwise have taken.  Otherwise a communication which contained misleading acts and omissions, none of which would separately satisfy the causation test, may escape from classification as an infringement, even though (as may have been intended by the trader) their combined effect would satisfy the causation test."  Of significance to the current argument in what Briggs J said above is that he only considered that the aggregate effect of all misleading acts and omissions should be ascertained for the purposes of the causation test.  He did not hold or opine that such aggregate was required to determine the falsity of the commercial practice or of any information contained within it.

In Purely Creative Ltd and others v Office of Fair Trading [2012] EUECJ C-428/11, the ECJ confirmed that the CPUTR should be interpreted purposively but that, at least in relation to para 31 of Schedule 1, a literal interpretation was required to fulfill that purpose.  That was partly because para 31 was in a list of those commercial practices which are in all circumstances to be regarded as unfair.  However, the ECJ said that the literal interpretation of para 31 was confirmed by the objectives of the UCPD.  In particular, article 1 of the UCPD provides that its purpose is to contribute to the proper functioning of the internal market and achieve a high level of consumer protection and Recital 17 of the UCPD makes it clear that legal certainty is an essential element for the sound functioning of the internal market.  Those objectives apply to the whole of the UCPD and hence to the UCPD originated provisions of the CPUTR and are best fulfilled by a literal interpretation.

Returning once more to the example of a replica Rolex watch bearing a disclaimer "Fake Rolex", such disclaimer cannot be effective to prevent the commission of an offence under reg 9 CPUTR.  The commercial practice "contains" the false information "Rolex" on the watch face.  The fact that the consumer is told that the watch is fake does not make the word "Rolex" on the face of the watch itself any less false and in fact only serves to confirm its falsity.  The requisite part of the first limb of the offence is therefore made out.  When it comes to the causation limb, the whole of the commercial practice must be considered as an aggregate.  The words "Fake Rolex" will either cause a consumer to buy the watch, because that is exactly what he wants to buy (at the right price), or cause him not to buy it because he is only interested in a genuine Rolex.  Either way, "it [the overall commercial practice] causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise".

 See also Motor Depot Limited and Wilkinson v Kingston Upon Hull City Council.

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