Summary of the Schedule 5 Investigatory Powers
Schedule 5 of the draft Consumer Rights Bill sets out the investigatory powers which will be made available to consumer law enforcers once the Bill passes into law, currently scheduled for 1 October 2015.
The Bill consolidates the investigatory powers already available to consumer law enforcers, currently contained in a wide range of legislation. Some specific powers relating to weights and measures and product safety legislation will remain in place, and will sit alongside the provisions of the Consumer Rights Bill.
BIS has produced Guidance on the proposed powers, which includes hypothetical examples as to which powers would be most appropriate in different consumer law situations.
The BIS Guidance summarises the powers available to enforcers, at the point when they are initially considering the use of enforcement powers. The powers covered by the Bill are:
- Power to Require information
- Power to Observe a Business or Make a test purchase
- Power to enter commercial premises with or without notice
- Power to enter premises with a warrant
- Power to enter premises without a warrant.
What is clear from the draft Bill and the BIS Guidance is the large amount of discretion given to enforcers when considering the use of the new enforcement powers under the proposed legislation. What remains to be seen is how these provisions will work in practice and the impact on businesses. One particularly noteworthy and concerning power under the Bill is the power for enforcers to enter commercial premises without a warrant.
Entering a Premises With or Without Notice
The Bill introduces a requirement for enforcers to give two working days' written notice to the occupier of a commercial premises. There must be at least two working days' between the occupier receiving the notice and the power being exercised. The notice, which must be in writing, must be delivered by post or left at the premises in question.
However, the requirement to give notice can be waived by enforcers if a relevant exemption applies under the Bill. There are 5 exemptions in total, some of which will be administered at the discretion of enforcers. Of particular concern is the exemption which will allow enforcers to waive the requirement to give notice if they "reasonably suspect a breach of consumer law". BIS guidance states that what constitutes "reasonable suspicion" will depend on the facts and circumstances of each case.
BIS Guidance also suggests that sources of intelligence an enforcer may use to reasonably suspect a breach may include the enforcer's own knowledge of the business and information obtained from other agencies such as the Police or Customs officials. What causes concern is that no further information or clear examples are contained in the guidance to provide an indication as to how this exemption will be applied in practice.
Currently the example in the Guidance shows the use of the exemption only after an enforcer has entered a premises to observe a business (for example to make a test purchase). There is no example as to how the "reasonable suspicion" test would be applied independently to the other powers. On the face of it and as matters currently stand, there is considerable scope for the enforcement powers under the Bill to be utilised inconsistently across the country and across different enforcement authorities.
What "rights" are available to businesses under the Bill?
Although the proposals may seem alarming, the Bill does provide some safeguards for businesses. In summary a business can expect:
- Access to seized goods and documents
- Notice of testing of goods when proceedings or restriction notices result from the testing
- Appeals against detention of goods and documents
- Compensation for loss or damage in specified circumstances
- An automatic exemption from keeping records for certain packers of bread.
However, the overall tenor of this part of the Bill and its accompanying draft guidance means that there is considerable latitude for enforcers in the way this is interpreted and actioned. We would urge businesses to carefully digest this section of the Bill and consider what impact these changes are likely to have, in order to be in a position to challenge an enforcer's actions should the need arise.