DWF partner, Dominic Watkins, recently spoke to Lexis Nexis along with The Competition and Markets Authority to highlight what issues and developments are likely to be important in 2016 in the area of consumer protection enforcement.
A view from the regulator
What issues and developments to you think are going to be important in 2016?
CMA: Looking ahead, we will be building on the work we have started, taking action to achieve improved market-wide compliance to the benefit of consumers and fair-playing businesses.
We will be focusing on markets which are new or emerging, or where there are novel or untested consumer law issues, or where a large number of consumers, or a group of vulnerable consumers, are affected.
We will also be continuing to play a leading role on unfair contract terms issues, building on the guidance we published in July and on the improved protections in the Consumer Rights Act 2015 (CRA 2015). When we take cases we will consider the use of the new powers that CRA 2015 has given enforcers to provide enhanced remedies for consumers, including the possibility of securing redress.
Legal developments and practical impact
How is 2016 shaping up in terms of important cases and legislative developments?
Dominic Watkins: If politicians are to be believed we might see an ambitious trade deal in the Transatlantic Trade and Investment Partnership (TTIP), which has the potential to have a huge impact on the shape and scope of regulation and we will have the EU referendum or it will be getting closer. Both have the potential to have vast impacts both on the economy, the regulation we currently have and that which will come in the future and the way in which clients are able to make the most of regulatory equivalence whether in the EU or between the EU and US under TTIP.
My crystal ball is telling me that 2016 will see a huge shift in health and safety, food safety and corporate manslaughter penalties when the sentencing guideline changes come into force on 1 February. This will mean that any defendant sentenced after that date will face a fine much much larger than ever experienced. Seven-figure fines will become standard in mid-range cases and be the new normal rather than the exception.
There will be a big change in the way that these cases are dealt with to try and minimise the huge fines. When moving from one harm level the next one up typically increases the starting point by over 100%. The position between culpability levels is even more stark with fines for safety offences jumping from a maximum starting point of £300,000 at low culpability to £1.3m if it is medium culpability, £2.4m at high culpability and £4m at very high culpability. The stakes are now higher and much more obvious and therefore this is an area requiring considerable focus.
We may see the Enterprise Bill become law and there are several proposals in the EU that might come to fruition.
What would you like to see in 2016?
Dominic Watkins: The sentencing guidelines not coming into force? The ASA signing up to recognise Primary Authority. TTIP finalised and that we vote to remain in the EU...but I might be premature on the last one.
Clients and business developments
How might the expected developments in 2016 affect your business and clients?
Dominic Watkins: If TTIP were to be agreed then this could have a significant impact for clients in opening up the EU market to the US and the US market to the EU. The practical consequence of this will be a change in the way that regulation is approached moving forward and may mean that existing laws have to be changed. Much still to be decided but given the breadth of the agreement it definitely has the greatest potential to impact clients.