The Consumer Protection from Unfair Trading Regulations 2008 (CPRs), implemented as a result of the Unfair Commercial Practice Directive (Directive 2005/25/EC), came into force on 26 May 2008. The new legislation is aimed at protecting consumers against unfair, misleading or aggressive marketing practice.

The UK adopts a sector-specific approach to legislating trading and unlike other EU member states does not have a general fair-trading duty. Therefore, in order to prevent "gold plating" the UK Government implemented the Directive by copying it into existing Regulations; in particular sections 20-26 of the Consumer Protection Act 1987 and the Trade Descriptions Act 1968. The CPRs also revoke and replace the Control of Misleading Advertisements Regulations. The Regulations apply equally to both goods and services and also extend to intangible rights such as cancellation rights.

CPRs include a general prohibition (Regulation 3) of unfair commercial practices. This can include a lack of professional diligence, or the adoption of a practice that materially distorts, or is likely to materially distort the economic behaviour of the average customer. Even if the information is factually correct, if it deceives the typical customer into making a transaction he/she would not otherwise have taken, the use of the information is prohibited. Regulations 5 and 6 prohibit misleading actions and misleading omissions. This can be where a product is marketed in a way that creates confusion with a product, trademark, trade name or other distinguishing mark of a competitor. Regulation 7 prohibits aggressive commercial practices which can include intimidating or exploiting customers and restricting their ability to make free or informed choices.

The "typical consumer" is reasonably well informed and reasonably observant. However, there are certain groups to which an exception is made, for example children. Examples of aggressive practices can include pressurising bereaved families to buy expensive coffins when they are at their most vulnerable and doorstep traders who insist on taking a consumer to the bank to collect money for immediate payment.

The legislation also includes a blacklist of 31 unfair practices. These commercial practices are always considered to be unfair and are therefore prohibited. Consequently there is no requirement to prove the effect, or likely effect on the average customer, in order to prove the breach.

A significant example of one of the blacklisted unfair practices is "promoting a product similar to a product made by a particular manufacturer in such a manner as deliberately to mislead the consumer into believing that the product is made by the same manufacturer when it is not". This is an example of copycat packaging or marketing and is of particular significance to brand owners that want to take action against the offender. The UK does not have a specific law against unfair competition and therefore brand owners previously had to rely on their intellectual property rights (trade marks, designs or copyright) and the law of passing off to protect themselves against copycat products.

Anyone with a legitimate interest is entitled to raise a complaint against unfair commercial practices but this must be brought before one of: the Local Authority Trading Standard Services, the Department of Enterprise, Trade and Investment in Northern Ireland or the Office of Fair Trading. These all have a duty to enforce the CPRs and this may be achieved through enforcement orders, and criminal proceedings. However, unlike in Ireland, there shall be no powers of granting compensation for the consumer that raised the complaint. Furthermore, the Trading Standards Institute has warned that resources are limited and that only the most serious cases will be investigated. There is no direct right for third parties to raise court proceedings under the CPRs.

Business Protection from Misleading Marketing Regulations 2008
The Business Protection from Misleading Marketing Regulations 2008 (BPRs) also came into force on 26 May 2008 with the aim of preserving business-to-business protection within the new framework of the Unfair Commercial Practice Directive (Directive 2005/29/EC).

The fundamental objective of the BPRs is to protect businesses from misleading advertising by other businesses. The BPRs effectively replace the criteria provided by the Control of Misleading Advertisements Regulations 1988 (repealed by the CPRs) in determining whether an advert is comparative. However, the BPRs have the additional remit of ensuring that where an advert is comparative, it is not a misleading act or omission detailed in the CPRs.

There are two key offences under the BPRs; namely, advertising which misleads businesses (Regulation 3); and comparative advertising (unless it complies with the provisions of Regulation 4).

The BPRs define "advertising" widely and can include any representation made by a business in the promotion of their goods or services. In assessing whether advertising is misleading, the enforcing authority will examine whether the advert deceives or is likely to deceive a business that it intends to induce and whether its economic behaviour has changed as a result. In terms of comparative advertising, the enforcing authority will identify if the business concerned is a competitor and whether it has suffered injury or is likely to suffer injury as a result of the comparative advert.

Where a business contravenes the BPRs, it is only the enforcing authorities (Office of Fair Trading, the Trading Standards Services and the Department of Enterprise, Trade and Investment in Northern Ireland) that are capable of taking action against the business. The BPRs grant enforcement authorities several powers including the ability to carry out investigations where the authority can enter premises with or without a warrant and the ability to seek an injunction requiring the business to act within the parameters of the BPRs. It is also possible for BPRs to impose criminal sanctions for breaches. This extends to the officers of a business and could result in a company director receiving a fine of up to £5,000 or a prison term of up to two years.

02 July 2008

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