Soon after key changes to UK consumer protection laws under new “unfair commercial practices” regulations, HM Govt is now looking at radical changes to how they should be enforced. James Baker introduces the “Local Better Regulation Office” and other delights.
Topic: Consumer protection
When: Possibly October 2008
A hitherto little-known statute that will radically change the UK's advertising law enforcement landscape is grinding ever closer to Royal Assent.
The Regulatory Enforcement and Sanctions Bill ("RES") will significantly impact policing by Trading Standards of the recently in force Consumer Protection from Unfair Trading Regulations 2008, for example.
The RES is designed to implement the key recommendations of The Hampton Review: 'Reducing Administrative Burdens: Effective Inspection and Enforcement', published in March 2005, the Macrory Review: 'Regulatory Justice: Making Sanctions Effective', published in November 2006 and the Government paper Next Steps on Regulatory Reform, published in July 2007.
The main objects of the Bill are to streamline and improve regulatory enforcement and to enable ministers to confer new sanctioning powers on regulators.
The plan is to place a more varied and flexible range of sanctioning tools at the disposal of UK consumer law enforcement agencies, rather than the unwieldy, time consuming and costly blunderbuss of a criminal prosecution.
But there is a little more to it than that.
The RES comprises four key parts:
- Part 1 provides for the establishment of a statutory corporation known as the Local Better Regulation Office (LBRO) and makes provision about its objectives and functions;
- Part 2 makes provision for more consistent and co-ordinated regulatory enforcement by local authorities;
- Part 3 provides for the introduction of a new expanded framework for regulatory sanctions by enabling Ministers to confer new civil sanctioning powers on regulators in relation to specific offences;
- Part 4 provides for the introduction of a duty on regulators not to impose or maintain unnecessary burdens.
Part 1: Local Better Regulation Office:
The LBRO is intended to promote greater consistency among local authorities, and between local authorities and central government, and to keep the burdens of regulation on compliant businesses to a minimum.
The objective of the LBRO is to ensure the local authorities exercise their "relevant functions". This is defined as firstly imposing requirements, restrictions, setting standards or giving guidance on relevant enactments and secondly and more importantly ensuring compliance with and enforcement of the relevant enactments. The relevant enactments include any regulations concerning consumer and environmental protection and specific legislation including:
Copyright, Designs and Patents Act 1988
- Fraud Act 2006.
- Gambling Act 2005.
- London Olympic Games and Paralympics Games Act 2006.
- Olympic Symbol etc. (Protection) Act 1995.
- Consumer Protection from Unfair Trading Regulations 2008
- Trade Marks Act 1994
Part 2: Co-ordination of regulatory enforcement:
This section of the Bill applies where a person carries on an activity in the area of two or more local authorities and each of those authorities has the same relevant function in relation to that activity, for example where a business sells a product in two different local authorities and is subject to the trading standards rules of both authorities. The Bill permits LBRO to nominate a primary authority to be responsible for the activities of that person in the areas of advice, guidance and enforcement.
Part 3: Civil Sanctions
The objective of Part 3 of the Bill is to provide a framework for a range of new and expanded civil sanctions which will allow regulators to tackle non-compliance in ways in which it is hoped will be transparent, flexible and proportionate to the offence. These powers can be transferred by a Government minister by statutory instrument to the relevant bodies such as the Gambling Commission, the Information Commissioner, Trading Standards, the Office of Fair Trading and Ofcom.
The sanctions which these regulators will likely be empowered to impose include:
- Fixed monetary penalties. The amount of such a penalty will be specified by the relevant order or calculated in accordance with it. Regulators may only impose a fixed monetary penalty when satisfied beyond reasonable doubt that a person has committed the relevant offence.
- Discretionary requirements. These include variable monetary penalties, compliance notices and restoration notices. Again, the regulator may only impose this type of sanction when satisfied beyond reasonable doubt that a person has committed the relevant offence.
- Stop notices. This sanction requires a person to cease an activity that has given rise, or is likely to give rise, to regulatory non-compliance, such as the manufacture or sale of a particular item. A person who fails to comply with a stop notice will be guilty of a criminal offence.
- The power to exact Enforcement undertakings. A minister may make an order which allows a regulator to accept enforcement undertakings offered by a person. The type of actions which may be offered in these undertakings are set out in the Bill and include actions which ensure that a person does not repeat or continue non-compliant actions.
Part 4: Regulatory burdens
The main object of Part 4 of the Bill is to introduce a duty on regulators not to impose or maintain unnecessary burdens when exercising a regulatory function.
Why this matters:
The current Bill has passed its 3rd reading in the House of Lords and second reading of the House of Commons. The BERR hopes the Bill will receive the Royal Assent in July 2008. At present they believe Part 1 will be in force in October 2008, Part 2 in April 2009 and Parts 3 & 4 later in that year.
The introduction of this legislation forms part of the government's "Better regulation" agenda and furthers its commitment to reducing administrative burdens on the commercial sector by £3.5 billion by 2010. Anything which reduces rather than adds to the administrative burdens will be welcomed by our readers, although one wonders how a measure that seems likely to increase the range and number of sanctions imposed on advertisers can have the effect of "reducing administrative burdens."
There is also the additional administrative cost of the new "Local Better Regulation Office". We hope of course that it will be worth every penny, but there remains that lingering doubt.