The Consumer Protection Act 1987—New Controls on Misleading Pricing
| Date | 01 March 1988 |
| DOI | http://doi.org/10.1111/j.1468-2230.1988.tb01752.x |
| Author | Richard J. Bragg |
| Published date | 01 March 1988 |
LEGISLATION
MISLEADING PRICING
Introduction
TRADERS who mislead the public by giving false or misleading
indications as to the price
of
their goods, or indulge in dubious
price comparisons, have long been the target of consumer
protectionists. One could simply ban all price comparisons, thus
satisfying those who argue that there is no such thing as a bargain
offer. However most people take a more moderate line holding
that in a capitalist society traders should be free to market their
wares in the most advantageous way possible without misleading
the public. As a D.T.I. Report’ has stressed, one must balance the
benefits of consumer legislation against its compliance costs. Any
legislation in this area should be simple to understand and enforce,
whilst retaining a comprehensiveness to achieve the desired
prohibitions.
The first attempt at such legislation was section
11
of the Trade
Descriptions Act 1968, but its inadequacies soon became apparent.
It was limited in its scope and easily evaded. An attempt was made
to bolster it by the Price Marking (Bargain Offers) Orders 1979,2
but they were extreme in attempting to net all potentially misleading
price comparisons. The drafting was
so
complex that the Orders
were regarded both by traders and enforcers as incomprehensible.
As
a result, there was little attempt to observe or enforce them.
The Orders also proved to have loopholes permitting some traders
to make comparisons which complied with the law, but flouted its
spirit. By 1981 the Director General of Fair Trading conceded
“substantial ambiguities” in the
order^.^
Increasing discontent in
all quarters meant that a new provision was essential. The only
surprise
is
that it has taken
so
long.
The Consumer Protection Act 19874 contains, in Part
111,
a
complete overhaul of the rules on pricing5 It repeals all existing
THE
CONSUMER PROTECTION ACT 1987-NEW CONTROLS
ON
’
“Burdens of Business”-A Report of a Scrutiny of Administrative
&
Legislative
Ryquirements. 1985.
-
Price Marking (Bargain Offers) Order 1979,
S.I.
364;
Price Marking (Bargain Offers)
(Amendment) Order 1979,
S.I.
663;
Price Marking (Bargain Offers) (Amendment
No.
2)
Order 1979, S.I. 1124.
Review of the Price Marking (Bargain Offers) Orders 1979-A Report by the
Director General of Fair Trading, O.F.T. October 1981.
‘
The Act will come into force under
s.50
by Ministerial Order and but this Part is not
ex ected
to
do
so
until well into 1988.
It
was the prices sections of the Consumer Protection Bill which received most
amendment in Parliament and indeed the Bill passed the Lords and got
to
the Second
Reading in the Commons without the Government having decided the status of the
Code. Consultation procedures were still under way when the General Election was
announced, and last minute amndments were necessary
to
settle
the matter. As a result
of
electoral events, the Bill passed its remaining stages in
3
days.
It
is inevitable that
there will be
errors
and inadequacies which more debate would have avoided. The view
seems to have been taken that speed was better than losing this part
of
the Bill, which is
more academically than politically controversial.
210
MAR. 19881
THE
CONSUMER PROTECTION ACT 21
1
provisions' and is a fresh attempt to impose effective but sensible
controls. The Act is backed and extended by a Code of Practice'
which puts substantial meat on the rather skeletal statutory
provisions, but the Act also retains an Order-making power.' The
Act does contain a new and exciting element, in that it follows the
Health
&
Safety at Work Act 19749 in creating a general rather
than a specific offence."' This moves towards the route, favoured
by the Director General
of
Fair Trading,
of
having a general duty
to trade fairly."
No
doubt the effectiveness
or
otherwise of the Act
will show whether this is the correct road for consumer protection.
There is
no
appearance, however,
of
the "Middle Theory"," with
its idea
of
the administrative offence. The offences retain full
criminal status, and strict liability remains in vogue.
The Code
of
Practice
The Code
of
Practice is governed by section 25 of the Act. Section
25(1)
allows it to contain matters
of
practical guidance and items
promoting desirable practices. Section 25(2) allows that any
contravention
of
the Code may be relied
on
as evidence tending to
establish the commission
of
an offence or the negativing of a
defence and that compliance with the Code may be relied upon as
evidence to the opposite effect. The Code itself creates no criminal
or
civil liability, but it must be taken into account by the Court to
clarify doubtful cases. Thus it has a "Highway Code" status.
Regulations
The Minister may make Regulations under section 26 of the Act.
There is a division of opinion, at the moment,
on
the content of
the Regulations to be made." The Government, currently, proposes
to make new Regulations in relation to the supply
of
electricity and
gas to tenants by a landlord other than as
an
inclusive charge
'
Trade Descriptions Act.
s.ll
and the Bargain Offers Orders. The latter were
made
under the Prices Act
1974.
'
This Article is based
on
thc 3rd Draft
of
the Code (November
1986).
A 4th Draft
(January
1988)
has bccn produced
for
discussion before the Act comes into force
probably in Scptcmbcr
1988.
There arc few amendments of substance. although some
provisions
will
appear instead
in
Regulations.
S.2(1)
is thought to be the first example
of
such an offence, but
no
prosecutions arc
''I
S.20(1).
Another gcneral offence is thc duty not to supply unsafe goods contained in
I'
See Borric
The Developrnenr
of
Cowsuttier
Law and
Polic.y-Bold
Spirits
and
I'
See
Tcnch
Towards a Middle Theory
of
Law.
Consumers Association.
1981.
I'
Strong representations were made by a "concordat" consisting of The Retail
Consortium. National Consumcr Council. LACOTS.
&
The Institute of Trading Standards
Administration to thc effect that some
of
the morc specific
rules
in the Code should
become directly cnforccablc Regulations. This move has thus far bccn resisted by the
Govcrnmcnt. but the Minister has agreed to further talks
on
the point.
*
S.26.
yet rcportcd under
it.
s.10
(Part
11)
of
the Consumcr Protection Act
1987.
Timorous
Souls
[Hamlyn] Stevens, 1984.
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