TheConsumer Protection (Amendment) Regulations 2014 (CPR) 1 is to reform the existinglaw on unfair commercial practices such as misleading and aggressive selling.The CPR came into force on 1 October 2014 amended the ConsumerProtection from Unfair Trading Regulations 2008 (CPUT)2. The problem with the CPUTis the clarity of the rights of redress that are available once breach of thoseregulations is established. Previously, consumers could not directly enforcethe CPUT as it could only be enforced by the Competition and Markets Authorityand Trading Standards.
3Consumerscould only rely on misrepresentation, duress and undue influence if they wantedto enforce the rights themselves. This is problematic as consumers often findit difficult to comprehend as they are quite technical. These areas wereinitially used in transactions between businesses which is not the mostsuitable for consumers. Moreover, these pre-existing rules had variouslimitations.
Amisrepresentation is a false statement of fact made that induces the consumerinto a contract.4This is illustrated in Spice Girls Ltd v Aprilia World Service5.There a few limitations to misrepresentation such as there is no remedy inthe cases of misleading prices and actual contract must have existed. Next,statements as to the future are not treated as misrepresentation as it is not astatement of existing fact.67 Although rescission can beobtained, it does not cover repayment of anything that is not the actual contractprice. Moreover, it must be proven that there was inducement.8Fora consumer to be able to claim under duress, it requires a contract that has anelement of threat. The threat must be independently illegal.
9 It offers the remedy of rescissionand is usually confined between business to business transactions. The problemis there is no protection for consumers when aggressive selling or enforcementis used. It has very limited scope where it cannot be used even to catch obstructivebehaviour such as not answering consumer’s calls. There is no rescission ifpre-contractual threats were made, causing expenditure and in cases of threatsused in repayment of debt.
There are also no damages available for economic lossesor distress.Theequitable doctrine of undue influence requires a special relationship of ‘trustand confidence’ which has been abused, leading to an uninformed decision madeby the person who trusted.10 In Allcard v Skinner11,it was held although there was undue influence, she could not recover due to herdelay. It will materially affect whether or not someone can obtain relief if theyneglect their rights knowingly.12 This rule is usually usedto protect businesses from liability and is unlikely to establish in businessto consumer transactions. There is no damages available for distress.TheCPUT has different categories of prohibition. Schedule 113 contains31 examples of conduct which are the black list of prohibited practices.
Reg.5Para 2 sets out when action would be considered as misleading. This provisionis wider than misrepresentation as it covers both existing fact and futurestatements.14It offers higher protection as it covers situations even if it is only likelyto deceive.15The remedies available are unwinding which also applies to situations of no contract,damages, and discount which was not claimable under misrepresentation.Reg.7Para 1 sets out when commercial practices are deemed as aggressive.
Para 2determines when it uses harassment, coercion or undue influence. This coverssimilar things covered under duress and undue influence but its scope is muchbroader. There is no need for an illegal act to break a contract or a need forspecial relationship. Examples of aggressive sales are pressure selling and consistentphone calls at home or work to the consumer. The remedies available are unwind,damages and discount. Consumers can also claim for distress.TheUnfair Commercial Practices Directive (UCPD) 200516 concerns unfair businesspractices in EU law. It requires member states to control these practicesthrough public enforcement.
It is implemented in the UK by the CPUT. The UCPDdoes not require that there be private law rights for those affected by thesepractices although it does not prevent Member States from giving them.17Most academics assert that is it necessary to introduce private law rightsbased on the UCPD as inconsistency between the public and private realm is confusing.
The Law Commission considered the issue, which lead to the CPR 2014.18Essentially,CPR will provide higher consumer protection by allowing consumers to enforcetheir rights directly against the trader.19 The main premise is tointroduce rights of redress to those who have been victims of aggressive practicesthe entitlement to unwind, discount and damages.20 The main provision is Regulation3 which addresses regulations 27A-K to the CPUT. Reg.
3 introduces new Part 4Awhich explains when and how the rights to redress can be enforced. The newregulation 27A sets out when a consumer has a right to redress. Another reformit introduces is under regulation 27B allows remedies to apply to contractualand non-contractual situations when payments are made.Inthe event that the consumer succeeds in proving the considerations in Reg.27A,the following remedies are available. The consumer has the right to treat thecontract as void within 90 days of the contract being entered to or thegoods/service being delivered.21 Next, the consumer canreceive a discount on the price payable under the contract.
22 The 90-day limit does notapply here, and the deductions ranges from 25% to 100%, which increases incrementallyby 25% depending upon the seriousness of the breach.23 Finally, the grounds forright to claim damages are various, such as the financial loss suffered, distress,physical inconvenience or discomfort that the consumer has suffered.24 1 Consumer Protection (Amendment)Regulations 2014/870 Reg. 32 Consumer Protection from UnfairTrading Regulations 2008 3 FairTrading Act 197; S.17(2), S.264 M Furmston, Cheshire, Fifoot and Furmston’s Law of Contract (16thedn OUP, 2012) 3395 Spice Girls Ltd v ApriliaWorld Service 2000 EWHC Ch 140 6 M Furmston, (n 30) 3417 Maddison v Alderson (1883)8 App Cas 467 8 M Furmston, (n 30) 3459 ibid 38910 M Furmston, (n 30) 40011 Allcard v Skinner (1887)36 Ch D 14512 M Furmston, (n 30) 40113 Schedule 1, CPUT 200814 Regulation 5, Para 4(c) CPUT 200815 Regulation 5, Para 2(a) CPUT 200816 Unfair Commercial Practices Directive 2005/29/EC17 ibid, Art 3(2) 18 Law Com report (Consumer Redressfor Misleading and Aggressive Practices, (Law Com No 332, 2012), https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/236079/8323.pdf19 Regulation 2(1) ‘commercialpractice’20 Regulation 27K CPR 201421 Regulation 27E (3) CPR 201422 Regulation 27I CPR 201423 Regulation 27I (4) CPR 201424 Regulation 27J (1)(a), (b) CPR2014