Commercial Practice and a Single Consumer
The purposive approach to the interpretation of the Europe spawned CPUTR need not suffer from an inability to apply the Interpretation Act 1978. First published in the Criminal Law & Justice Weekly (2016) 180 JPN 310.
The plural includes the singular – or does it?
A key element of the offences set out in the Consumer Protection from Unfair Trading Regulations 2008 ("CPUTR") prohibiting misleading representations made by traders is that the trader engages in an unfair "commercial practice" which is defined in reg.2(1) thereof 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". There was some doubt as to whether the use of the word "consumers" in the foregoing definition meant that there could be no commercial practice and hence no breach of the CPUTR where a trader only dealt with a single consumer. Had the CPUTR been home grown United Kingdom legislation, the Interpretation Act 1978 ("IA") would have applied to it and the argument that a commercial practice had to engage more than one consumer would have been readily defeated by s.6(c) IA which provides that: "In any Act [including, by virtue of ss.21(1) and 23, regulations made under an Act] unless the contrary intention appears … words in the singular include the plural and words in the plural include the singular."
Interpretation Act of no application to EU directives
The "only rule for the construction of Acts of Parliament", said Tindal LCJ in the Sussex Peerage Case (1844) 11 Cl&Fin 85, "is that they should be construed according to the intent of the Parliament which passed the Act. If the words of the statute are in themselves precise and unambiguous, then no more can be necessary than to expound those words in their natural and ordinary sense. The words themselves alone do, in such case, best declare the intention of the lawgiver." The great worth of the IA is that it provides a ready guide to determining what Parliament intended when it used the words and expressions explained in that Act. Equally, the IA enables Parliament to legislate more succinctly spared inter alia from having to spell out in every statute the presumption that "words importing the masculine gender include the feminine" and vice versa (s.6(a) and (b) IA). But, when it comes to interpreting international law, or domestic law intended to give effect thereto, the IA ceases to necessarily indicate Parliament's intentions. In Corocraft Ltd and Another v. Pan American Airways Inc [1969] 1 QB 616, [1969] 1 All ER 82, Lord Denning MR said "… it is the duty of these courts to construe our legislation so as to be in conformity with international law and not in conflict with it."
Article 288 of the Treaty on the Functioning of the European Union requires that Member States adopt its directives. It follows that, where Parliament enacts legislation in order to give effect to an EU directive, Parliament's will can be found in the directive itself. The CPUTR were made under s.2(2) of the European Communities Act 1972 for the purpose of implementing the UK's obligations under the Unfair Commercial Practices Directive, 2005/29/EC ("UCPD"). In Office of Fair Trading v. Purely Creative Ltd [2011] EWHC 106 (Ch), a case concerned with the interpretation of the CPUTR, Briggs J said: ''Domestic regulations designed to implement EU directives, and in particular maximum harmonisation directives, must be construed as far as possible so as to implement the purposes and provisions of the directive. The interpretation of words and phrases is neither a matter of grammars nor dictionaries, nor even a matter of the use of those phrases (or of the underlying concepts) in national law. If similar words and phrases are used in the directive itself, then they must be interpreted both in the directive and in the implementing regulations by means of a process of interpretation which is independent of the member state's national law and, for that matter, independent of any other member state's national law. For that purpose the primary recourse of the national court is to the jurisprudence of the ECJ. The national court may also obtain assistance from, but is not bound by, guidance issued by the Commission, and by the decisions of other national courts as to the meaning of the relevant directive.'' The CPUTR in its outlawing of unfair commercial practices does use "similar words and phrases" as are used in the UCPD itself.
The approach to interpretation in R v. X Ltd
In R v. X Ltd, [2013] EWCA Crim 818, (2013) 177 JP 393 ("R v. X"), X was a company engaged in the business of selling home security systems. X sold a CCTV system to a customer, C, and was subsequently prosecuted for offences contrary to the CPUTR it being alleged that X had made a materially inaccurate claim as to the nature and extent of the risk to the personal security of C if he did not purchase a CCTV system (reg.12 and para.12 of sch.1), that X had engaged in a misleading action in giving false information that the system would be fit for purpose (reg.9) and that X had contravened the requirements of professional diligence (reg.8). In each case the offence required proof that X had engaged in a "commercial practice". The trial judge acceded to a submission of no case to answer and dismissed all the counts against X. In defending the prosecutor's appeal, two of the contentions made on behalf of X were that the word "practice" connotes a habitual or repeated effect and that a complaint by a single consumer was insufficient.
It is not obvious from the judgment of the Court of Appeal in R v. X, given by Leveson LJ, that it was endeavouring to construe the CPUTR so as to implement the purposes and provisions of the UCPD. The judgment, in relation to the proper construction of the phrase "commercial practice" did, however, start by noting that the trial judge had "concluded that the purpose of the relevant directive was not to make individual errors unlawful but to make practices unlawful". Whether or not his conclusion on the law was right, the trial judge had therefore adopted the correct approach of considering the "purpose" of the UCPD. Leveson LJ, however, made no direct reference to the purpose of the UCPD as an aid to interpretation and made only an oblique reference to just one of its provisions. On the face of it, the Court reached its decision by an analysis of the wording of the CPUTR almost in isolation and adopted a literal rather than a purposive approach to its interpretation. Leveson LJ said: "[Dealing] with 'commercial practice', by using the phrases 'any act' and 'any course of conduct', it is argued by [the prosecution] that the regulation is intended to cover both isolated acts and repeated behaviour … In our judgment, there is considerable force in this submission, particularly as the definition [in reg.2(1)] includes 'any act … by a trader which is directly connected with the promotion, sale or supply of a product' (our emphasis). The use of the plural ('consumers') does not take the matter further: Regulation 2(2) makes it clear 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 …' (our emphasis). In the circumstances, it is clear that a commercial practice can be derived from a single incident. It will depend on the circumstances. It goes further than that. The use of the words '(if any)' in the definition permit the conclusion that there need not be any commercial transaction at all. In our judgment, the concept is concerned with systems rather than individual transactions." It was also held that "it cannot be a requirement that there be necessarily more than one customer [by] whom complaint is made."
There are, however, a couple of indications in the judgment that suggest the Court of Appeal had in fact used the correct approach even if it was not overtly stated. Firstly, no reference was made to the IA. It must be assumed that this was not an oversight, but that the Court deliberately did not seek to prey its provisions in aid because it recognised that they were inapplicable to what was essentially the construction of EU law. Secondly, the sole reference which was made to the UCPD is instructive. Counsel for X had sought to rely on Zentrale zur Bekampfung unlauteren Wettbewerbs eV v Plus Warenhandelsgesellschaft mbH ECLI:EU:C:2010:12. Leveson LJ, however, observed that the Court of Justice in that case had made it clear that art.2(d) UCPD "gives a particularly wide definition to the concept of commercial practices: '… any act, omission, course of conduct or representation, commercial communication including advertising and marketing, by a trader, directly connected with the promotion, sale or supply of a product to consumers'." As we have seen, those words also appear in reg.2(1) CPUTR and hence the Court of Appeal must have considered that it was appropriate for them to have the same wide definition there as in the UCPD. Nevertheless, by not apparently exploring the other provisions of the UCPD, the Court of Appeal did not avail itself of its purpose as disclosed in its preamble. Neither did it apparently take account of the UCPD's purpose as expressly stated in Article 1 thereof: "The purpose of this Directive is to … achieve a high level of consumer protection by approximating the laws, regulations and administrative provisions of the Member States on unfair commercial practices harming consumers' economic interests." In the result, the Court of Appeal's interpretation of the CPUTR did "achieve a high level of consumer protection", but it was perhaps remiss that its judgment did not expressly state that this was a factor in making its decision.
Continued in Part 2.