FRED PHILPOTT
JONATHAN GOULDING
GOUGH SQUARE CHAMBERS
There are 5 CPUT prohibited practices
 Contravention of the requirements of
professional diligence
 Misleading actions
 Misleading omissions
 Aggressive commercial practices
 Automatically unfair practices
(schedule1)
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Commercial Practice
Trader
The Average Consumer
Transactional Decision
Professional Diligence
Good steer given by some cases from the higher courts in 2011/12
Civil cases
OFT v. Purely Creative and others [2011] CTLC 45
Purely Creative .v. OFT [2012] CTLC 40
Purely Creative Ltd and others – ECJ case C-428/11
OFT v. Ashbourne Management Services Limited [2011] CTLC 237
Criminal cases
R (Surrey Trading Standards) v. Scottish and Southern Energy [2012]
CTLC1
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Purposive interpretation
“..must be construed as far as possible so as to implement the
purposes and provisions of the directive” (at para 40)
Average Consumer - as defined in Reg 2(1)
“reflects the commonsense proposition that the UCPD exists
to protect from being misled consumers who take reasonable
care of themselves, rather than the ignorant, the careless or
the overhasty consumer” (at para 62)
Transactional Decision – as defined in Reg 2(1)
“any decision with an economic consequence..” (at para 68),
but is it?
Causes or likely to cause
“whether, but for the relevant misleading act or omission…the
average consumer would have made a different decision from
that made” (para 71)
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Early UK case considering professional dligence
Gym providers standard terms unfair and would be
expected not to include such unfair terms in
agreements recommended to consumers.
“In recommending the use of these agreements
which are unfair… and in seeking payment of
subscriptions under them … the defendants … have
not acted in accordance with the standard
commensurate with honest market practice and have
caused consumers to take transactional decisions
they would not otherwise have taken” (para 227)
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Meaning of “Trader” and “Commercial practice”
SSE PLC was convicted in the Crown Court of 2
counts of sales agents being trained to use
misleading sales scripts in doorstep selling of
energy.
Appeal dismissed – in construing “trader” together
with “commercial practice” – the court noted the
wide definition of both in the regulations.
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Important issue – can a one off transaction amount
to a “commercial practice”
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R v.Christopher Steele. Snaresbrook Crown Court.
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R v X Limited [2013] CTLC 145. A “commercial
Judge dismisses case because it fell outside scope of
“commercial practice” – involved a single building
contract (April 2012)
practice can be derived from an isolated incident,
but whether or not it does will depend on the facts
of the particular case.”
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Citroen Belux v Fedaralie voor verzekerings – en
Financiele Tussenpersonen (FvF ) – July 2013 Case
C-265 -12
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A national restriction on combined offers did not
contravene the maximum harmonisation of a
domestic measure being more restrictive than the
UCPD permitted where at least one component of
the offer was a financial service.
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CHS Tour Services GmbH v. Team4 Travel GmbH
Sept 2013 C-435/11
There is no automatic infringement of the
requirements of professional diligence if a
commercial practice is categorised as a misleading
commercial practice under Article 6 UCPD (
misleading actions).
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Trento Sviluppo srl , Centrale Adriatica Soc. Coop. arl v
Autorita Gurante delia Concorrenza e de Mercato Dec
2013 Case C-281/12
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Important transactional decision case.
The CJEU stated that the concept of ‘transactional
decision’ is broadly defined in the directive as ‘any
decision taken by a consumer concerning whether, how
and on what terms to purchase’
It decided that the concept covered not only the
decision whether or not to purchase a product, but also
the decision directly related to that decision, in
particular the decision to enter into the shop.
The question of whether the decision had to be one
with ‘economic consequence ‘ has been answered
emphatically with a NO !!
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4Finance UAB v Valstybiere - April 2014 Case C-
515/12
Banned practice schedule 1 para 14 “establishing,
operating or promoting a pyramid promotional
scheme”
The case decided that pyramid promotional schemes
constitutes an unfair commercial practice only when
such a scheme requires the consumer to give
financial consideration, regardless of its amount, for
the opportunity to receive compensation that is
derived primarily from the introduction of other
consumers into the scheme rather than the sale or
consumption of products.
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Consumer Protection (Amendment ) Regulations 2014
amends CPUT and new Part 4A gives consumers a right
to civil redress from 1st October 2014
Significant development implementing the Law
Commission recommendations.
Consumers will have the right to bring a civil action
against a trader for a commercial practice that is:
1) a misleading action
2) aggressive
Consumers will have a right to damages if they incur
financial loss or alarm, distress or physical
inconvenience which would not have been incurred in
the absence of the prohibited practice.
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Only have to look at TS Today each month to see
that big cases are being brought to court with many
instances of systemmic unfair trading
Fines and penalties can be high
Confiscation a potentially powerful tool as well
Recent case of R v Scott King [2014] EWCA Crim 621
good example of traders breaching CPUT at their
peril. Trader sold cars and falsely claimed that he
was acting privately ( Banned paractice sched 1 para
22). 58 cars involved. Court of Appeal held
£109,000 confiscation order representing the
turnover of the business was not disproportionate.