Explanatory Note
(This note is not part of the Regulations)
These Regulations implement Directive 98/27/EC of the European Parliament and of the Council of 19 May 1998 on injunctions for the protection of consumers’ interests, referred to in the Regulations as the “Injunctions Directive” (OJ No L166, 11.6.98, p.51).
The Regulations apply to any act contrary to a provision in certain EC consumer protection directives as transposed into the legal order of a Member State and which harms the collective interests of consumers. For the purpose of these Regulations these acts are defined as “Community infringements”. The ten relevant directives, which cover a wide range of consumer protection measures, are listed in Schedule 1. The Regulations also contain a non-exhaustive list of the United Kingdom legislation which, for the purposes of the definition of “Community infringement”, are to be regarded as transposing the ten EC directives into the United Kingdom legal order (regulation 2(3)).
The Regulations provide that the provisions of Schedule 2 have effect in place of the corresponding provisions in Part III of the Fair Trading Act 1973 (the “Act”) in relation to Community infringements (regulation 3). The existing provisions of Part III provide a means of dealing with traders who persist in a course of conduct which breaches the constraints imposed by civil or criminal law, in a way which is detrimental to the interests of consumers. Under section 35 of the Act the Director General of Fair Trading can apply for an order that the trader refrain from carrying on that course of conduct.
Schedule 2 provides that the Director General of Fair Trading and any qualified entity have the power to bring proceedings under section 35 of the Act in relation to any Community infringement. In addition to widening the range of bodies who may bring proceedings under section 35 of the Act, it displaces the existing requirement that before bringing proceedings under this section the Director General must first use his best endeavours to obtain a satisfactory written assurance from the trader that he will refrain from continuing that course of conduct or a similar one.
Except where the Director General considers that circumstances justify proceedings being brought immediately, qualified entities must first consult both the Director General and the trader and give the latter the opportunity to stop the infringement without the need for court action. If the infringement is not stopped within two weeks after the request for consultation is received, the qualified entity may bring proceedings without further delay.
Where the relevant Court is satisfied that the trader has engaged in conduct which constitutes a Community infringement or is likely to do so, the court may make an order (including an interim order) under section 37 of the Act. The order, to be known as a Stop Now Order, must require the trader to stop the infringement or not to engage in the conduct which would constitute an infringement. In addition, the court may, where appropriate, order the publication of the decision to make the order (in full or in part) and/or the publication of a corrective statement with a view to eliminating effects of the infringement.
The Regulations identify three categories of qualified entities: “public UK qualified entities” listed in Schedule 3 to the Regulations (statutory regulators and trading standards departments); “other UK qualified entities”; and “Community qualified entities.”
“Community qualified entities” are defined as entities from other Member States which are listed in the Official Journal of the European Communities under Article 4.3 of the Injunctions Directive.
“Other UK qualified entities” are private consumer organisations meeting objective criteria set out in regulation 4(2) who have been designated for this purpose by the Secretary of State. Private consumer organisations may be designated for all purposes under these Regulations or in relation only to particular types of Community infringement. The names of other UK qualified entities are to be published in a manner that appears to the Secretary of State best calculated for bringing it to the attention of persons who may be concerned. At the request of an other UK qualified entity, the Secretary of State is required to notify the European Commission that it should be added to the list of bodies qualified to bring proceedings which is published in the Official Journal (regulation 4).
The Regulations empower the Director General and public UK qualified entities to bring proceedings in other Member States and to bring proceedings in the UK on behalf of Community qualified entities. The Director General, public UK qualified entities and other UK qualified entities on the Official Journal list may co-operate with each other and with Community qualified entities for the purpose of bringing proceedings under these Regulations or in other Member States (regulation 5).
The Director General is required to publish advice and information concerning the operation of the Regulations (regulation 6). If more than one of the Director General, any public or other UK qualified entity are contemplating bringing proceedings under these Regulations against a particular trader, the Director General may direct which entity may bring proceedings, or that only he may do so. Where the Director General directs that only he may bring proceedings he may take into account whether the infringement could be stopped by other existing means (regulation 7).
A Regulatory Impact Assessment of the costs and benefits which will result from these Regulations has been prepared by the Department of Trade and Industry and is available from Consumer Affairs Directorate, Department of Trade and Industry, Room 407, 1 Victoria Street, London SW1H 0ET (Telephone 020 7215 0341). Copies have been placed in the libraries of both Houses of Parliament.