In this article we will look at how officers of trade standards ensure that companies comply with the law on trade standards, including their powers to visit companies and take formal compliance action.
People who work for trading standards services are employees of the local authority (council) and are allowed to conduct their duties in order to implement laws on trading standards. Job titles and qualifications vary between various local authorities and between different roles, but they are referred to as trading standards officers, or TSOs, for the purposes of this document.
The legislation is implemented by trading standards services across a number of subject areas, including:
- Items with age limits
- Agriculture, Agriculture
- The health and protection of animals
- Fair Trade, including:
- Pricing Consumption
- Product specifications, digital content and services
- Conditions and Terms
- Standards for health and protection (some types of trading standards services, including London boroughs, do not enforce food law)
- Storing gas and fireworks
- Intellectual Rights Property (for example, counterfeiting)
- Protection of goods
- Measures and Weights
For a variety of purposes, trading standards services inspect business premises, but the underlying aim of a visit is normally to verify and ensure that the company complies with the legislation as well as to fix or examine any non-compliance. Trading standards services follow an intelligence-led strategy, where decisions on compliance practises are influenced by data analysis from multiple sources, including complaints and the historical history of a company. Trading standards officers may also carry out inspections of premises on a regular basis – for example, in conjunction with an annual programme of inspections.
Under Schedule 5 to the Consumer Rights Act 2015, TSOs have powers in certain situations. They may have extra powers or powers that are slightly different depending on the laws they are implementing. The key powers of a TSO include the authority to access premises, inspection powers and powers to secure or seize material that may be needed for evidence:
- A TSO can enter premises at any appropriate time to observe the conduct of a company, to inspect products or records, to test weighing or measuring equipment or to make a purchase for a test. Refusal of entry may be seen as obstructing an officer, which is a criminal offence.
- A TSO can enter your home or any other premises used solely or primarily as a residence, but only with a court warrant. If required, a TSO can also procure a warrant to access any premises by force, and this may be done, for instance, where entry is likely to be denied or obstructed.
- If the entry is for routine inspection, then before entering your premises, the TSO must give you two days’ written notice of the inspection. Note, however, is not needed if:
- you have waived the need for it to be offered to you
- The TSO is fairly suspicious that you have violated the rule.
- The goal of the visit will be defeated by giving notice
- It is not possible to inform you (for example, there is an imminent risk to public health or safety)
- The entry is for the purposes of the activities of market surveillance under the protection legislation
- If a breach of the law on trade standards is suspected, a TSO can seize goods and records
Genuine TSOs will often bear photographic identification, usually showing their name, department, and the local authority under which they operate. Then contact your local authority right away if you have any questions.
Services with trade standards have no direct powers to order you to stop trading. They can, however, seek orders from the courts, which may limit your activities.
A broad variety of options are available, but the exact options differ depending on the extent of the violation of the law on trading standards.
Companies are keen to comply with the legislation in most situations and to escape the threats and costs of formal compliance action. Many violations of the law on trade standards are addressed by the company’s advice and negotiated remedial measures (which may include modifying goods, processes, labelling or advertisement and/or arranging remedies for consumers affected by a breach).
Trading standards providers, however, still have structured options for compliance available to them. The decision to take formal action remains with the local authority, although it is possible that formal action will be taken if there is a significant violation (through unfair competitive advantage in terms of harm to consumers or other undertakings) or where the undertaking has failed to respond to or participate in informal attempts to ensure compliance.
Formal compliance and fines
There is a compliance policy for any trading standards service, which outlines how they aim to ensure that the action they take is fair and proportionate. This can be sought from the local authority.
The following are the key structured compliance choices.
Many infringements of the law on trade standards are criminal offences which can be tried in the Court of Magistrates or Crown Court. A successful prosecution may have a number of ramifications, including the following:
- A criminal record will be kept by the dealer
- A sentence or punishment. Trading standards offences may normally be met with a fine, and the amount is limitless in certain situations. Imprisonment is an option for the most serious cases, with a maximum duration of up to two years for such commercial offences. Where a corporation is sued for fraud, corruption or money laundering in addition to or because of commercial crimes, or for intellectual property law violations (trade marks and copyright), maximum sentences may also be very high (up to 14 years in prison)
- An order to pay victims money
- An order to pay for the investigation and prosecution expenses
- A ‘illegal conduct order’ limiting future conduct (for instance, a ban on contracts in the homes of consumers)
- Disqualification as director of a corporation (where the crime was related to a company) or from driving (where there is a good reason – for example, where the offence included bad driving or was facilitated by the use of a vehicle)
- Asset and money confiscation under proceeds-of-crime legislation
- Forfeiture of any unauthorised or infringing goods and any apparatus used to commit the offence
This is a formal notice, and can be provided if it is in the public interest to do so as an alternative to prosecution.
Trading standards programmes are under no requirement to include caution, but can be provided for relatively minor first-time offences.
ORDERS OF ENFORCEMENT
Trading standards services may appeal to the County Court or High Court for a compliance order for a number of violations that require the organisation to comply with the law. The following implications may include this:
- And the order itself. A violation of the order is contempt of court, which carries a maximum sentence of a fine and imprisonment of two years.
- An order for ‘improved consumer steps’ to be taken, including improvements in business processes and compensation for victims
- An order to cover the costs of the investigation and the proceedings against the court
- A prerequisite for the order to be publicised
This is a formal commitment by the organisation to comply with the legislation and to take improved consumer steps, if necessary.
There is no requirement to approve an undertaking for trading standards services, but it could be agreed if the undertaking actually appears to be committed to making amends.
Trading standards services will, in some instances, issue a notice requiring the company to take action or stop doing something without the need to apply for an order from the court. Depending on the legislation they are created under, these notices have different names and different requirements.
There will usually be a deadline for compliance with the notice. This can lead to legal proceedings if a corporation fails to comply with a notice; if the company disagrees with the use of the notice, it typically has the right to apply to the court or a tribunal to appeal against it.
A variety of regulations, including food standards, animal welfare, product protection, weights and measures, and fair trading, make compliance notices available.
PENALTIES OF ADMINISTRATIVE
In certain cases, a penalty notice can be issued by trade standards services, in essence imposing a fine directly on a company without the need for court proceedings.
Such warnings are available under a variety of rules, including those relating to leasing agents, secondary ticketing, single-use carrier bags and (in some areas) to the selling of alcohol by underage persons.
Usually, the corporation may appeal to the court or tribunal against the use of such a notice or against the extent of punishment levied.
Trading standards services are unable to order redress for individual customers or take legal action on their behalf, although they can give advice and assistance to consumers in court or via an alternative dispute resolution service to make their own cases (see ‘Alternative Dispute Resolution’).
However, trading standards services may apply for a court order requiring compensation to be charged in the event of conviction or an application for a compliance order.
Although most trade standards legislation is designed to protect customers, infringements of the law on trade standards place fair, respectable, compliant firms at a disadvantage. Moreover, trade standards services enforce laws that protect companies (such as the 2008 Business Security from Deceptive Marketing Regulations, covered in the ‘Business-to-Business Marketing’ Guide) and offer business advice. Local authorities have a constitutional responsibility to take account of the desirability of fostering economic development in their respective fields and, thus, trade standards services are keen to facilitate effective, compliant enterprise.
The Primary Authority is a structure administered by local authorities to provide business advice. See “Primary Authority” for more information.
The Economy, Energy and Industrial Policy Department (BEIS, known at the time as the Department of Business, Innovation and Skills) has issued detailed guidance on how the Consumer Rights Act 2015 affects the powers of trade standards officers: Investigative Powers of Consumer Law Enforcers: Consumer Rights Act 2015 Guidance for Companies.
BEIS has released guidelines on the ‘enhanced protection initiatives’ adopted by the 2015 Consumer Rights Act: Enhanced Consumer Measures: Consumer Law Enforcers Guidance. As the title of the paper indicates, it is mainly targeted at TSOs, but in their relations with trade standards services, it may also be of interest to corporations.