Summary of Enhanced Consumer Measures (ECMs)
Section 80 of the draft Consumer Rights Bill amends the existing enforcement provisions contained in Part 8 of the Enterprise Act 2002 to introduce additional consumer measures which can either be agreed with businesses (by way of an undertaking) or imposed by a Court (by way of an Enforcement Order). The ECMs proposed are not retrospective, so enforcers will only be able to consider them in relation to breaches of consumer law occurring once the Bill has come into force.
The reforms are intended to provide greater flexibility for enforcers investigating suspected breaches of consumer law. The draft Guidance to this part of the Bill states that in many cases the use of EMS on their own will be sufficient, but enforcers will also be able to bring both criminal and civil proceedings where offences are serious enough to warrant such a 'two-pronged' approach.
The 3 types of ECM the Bill will introduce are:
- Compliance; and
- Choice (sometimes referred to as Information)
When deciding which measures to implement, enforcement authorities should give consideration to what measure would be "just, reasonable and proportionate" in the particular circumstances. However, the legislation does not include a list of measures for each of the categories proposed. This is intended to give enforcers the greatest level of flexibility when implementing the measures in question.
How are the new measures intended to work?
As a general rule, enforcers should first seek to work with businesses to agree the appropriate enforcement measure to adopt.
Measures under this heading are based on the principle of refunding consumers who have suffered a loss due to the actions of a business in breach of consumer law. However, such measures will only be available when a consumer has suffered a loss.
When considering a redress measure, enforcers must take into account: the likely benefit to the consumer, the cost likely to be incurred by the business in question, and the likely cost to consumers to obtain the benefit of the measure.
The Redress measures also allow for a group of consumers to be refunded collectively. The BIS guidance note explains that where some consumers cannot be identified in such a scenario, an enforcer can seek a measure to require the business to pay the equivalent of the loss suffered to a consumer charity.
In essence these types of measure are designed to prevent or reduce the risk of a business committing further breaches of consumer law. The "just, reasonable and proportionate" considerations are important in such a scenario. Appropriate enforcement measures should take into account factors such as the size of a business, and the impact the measures may have on that business.
Although the legislation does not prescribe any specific measures, examples provided in the guidance include additional training for staff members and appointing a compliance officer to ensure there is no further breach of consumer law.
Also termed 'Information' in the BIS draft guidance, the Consumer choice measures are intended to enable consumers to access information in relation to a business's past performance and allow enforcers to seek an order for a business to give customers greater information on the business's past compliance with consumer law. The suggested example in the BIS Guidance suggests an order could be made against a business requiring them to publish their past breaches of consumer law (for example on their website or via social media) for customers to view.
Will the measures work in practice?
Whilst the proposed ECMs are well intentioned, and the draft guidance issued by BIS goes some way to explaining how the measures will work in practice, key questions remain over the implementation of the ECMs.Of particular concern is the suggested measure under the Choice banner of requiring a business to publicise their own previous infringements. The powers are also highly dependent on the decisions of individual enforcement officers and whilst the Guidance sets out some examples of what would be just, reasonable and proportionate, our concern remains that giving such latitude to individuals will inevitably lead to more inconsistency in enforcement rather than less.