Proposed new UK Consumer and Trading Standards Agency

The government has proposed that a new body should be created at the centre of government to co-ordinate work on consumer protection and trading standards. This follows the government’s acceptance of the recommendations of the Hampton Report for reducing burdens on business by streamlining the regulatory system.

A review of the regulatory burdens on industry carried out by Sir Philip Hampton in 2004 concluded that various simplifications could be made to streamline the regulatory and enforcement systems for business in relation to consumer trading activities. The areas covered include fair and safe consumer trading, usually enforced by the Trading Standards Departments of local authorities. Examples would be enforcement of the General Product Safety Regulations 2005 (GPSR) and the fair trading provisions of Part III of the Consumer Protection Act, as well as weights and measures rules.

The major recommendation was that a new agency, the Consumer and Trading Standards Agency (CTSA), should coordinate all aspects of the Trading Standards Service, apart from the Food Standards Agency, the proposed Animal Health Agency, and the Health and Safety Executive. Hampton proposed that the CTSA should exercise the consumer enforcement functions currently carried out by the Office of Fair Trading (OFT), the national Weights and Measures Laboratory (NWML), the British Hallmarking Council and the Hearing Aid Council.

Hampton recommended that the CTSA should give advice to business, educate consumers, manage the recently established Consumer Direct advice service, co-ordinate the performance framework for the Trading Standards Service, set standards and priorities for that Service, improve consistency of regulation and enforcement and take a lead in enforcement in relation to a national company.

The Government announced in its 2005 Consumer Strategy A Fair Deal For All an approach that seeks to promote strong markets by ensuring strong enforcement of competition laws, including empowering consumers to exercise choice based not only on full information but also through an extended ability to take enforcement action. Accordingly, the Department of Trade and Industry’s Consultation paper on implementation of the Hampton proposals envisages new powers such as the ability to take representative action on behalf of a group of consumers. Various other countries have such representative powers, although they are rarely exercised – because consumer bodies usually have insufficient funds to take such action, although if changes were made to litigation funding mechanisms or loser-pays rules there could be an explosion of litigation.

The DTI will be considering whether the CTSA should be a new separate body, or be grafted on to the OFT. The OFT favours the latter but industry is likely to strongly favour creation of a new body, since the OFT can be perceived as being authoritarian and too consumer-orientated, whereas the thrust of Hampton is to create a body that achieves effective enforcement by reducing burdens on reputable businesses and working with them constructively.

There are many uncertainties over how a new national organisation would operate whilst co-existing with continuing local enforcement authorities. Some national businesses (and the definition of that category remains unclear) have good existing relations with their local TSDs and would be loath to lose stability by being subject to some degree of control by a new national body. On the other hand, the Home Authority principle, under which a business’ local TSD’s lead advisory and enforcement role should be respected by the 200-plus other TSDs round the country is voluntary and is not always observed in practice. So a solution that seeks consistency, predictability and efficiency should be attractive.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

The original publication date for this article was 21/07/2005.