1. The experience of the UK in implementing the Unfair Commercial Practices Directive
Andrew Hadley
Office of Fair Trading
United Kingdom

2. What I will cover Implementing the Directive
Understanding the Directive
Explaining the Directive
Enforcing the Directive

3. Implementing the Directive
Before the UCPD
23 laws dealing with UCPD-related areas
Prescriptive and specific sectoral or product-based regulation
Uneven civil and criminal powers and enforcement
Legislative change – after the UCPD
23 laws repealed or amended – simplification of the legal structure
Principles-based, impact-based regulation
Consistent distribution of powers among enforcers

4. Implementing the Directive
Consultations
Several different consultations: Transposition, Criminal offences, Regulations, Guidance
Vital part of UK policy-making
Regulations
Consumer Protection from Unfair Trading Regulations 2008 (‘CPRs) from 26th May 2008 will implement UCPD
Business Protection from Misleading Marking Regulations 2008 (‘BPRs’) implements CMAD

5. Understanding the Directive
Discussions with EU partners
Early input into Draft Directive
Ongoing discussions at working groups
Discussions with other MS very helpful
OFT involved early on
UK internal discussions
Academic and practical discussions
Stakeholder group and project board
Widening circle of discussions throughout project

6. Understanding the Directive
Overlap with other laws and process
Contract law
Financial services
Distance Selling
Legal analysis
Legal academic papers
Legal input into production of materials
Preparing for enforcement

7. Understanding the Directive
Areas of concern / difficulty
Negotiation produces strange language!
Omissions (including I2P) will pose particular problems for the UK courts
Some Annex practices (e.g. 9, 17, 20) less clear than initially appears
Overlaps with other legislation
Benefits in discussions – building understanding of difficult issues
Importance of effective harmonisation

8. Understanding the Directive
Opportunities and positive outcomes
Common framework for consumer protection
Real benefits and shared objectives in working closely with other MS
Prohibitions on aggressive practices
Future-proofed general duty
Flexible, principles-based rules with conceptual materiality tests
Several practices banned outright

9. Tiers of prohibitions must satisfy effect test deemed effect
GENERAL PROHIBITION
(CONTRARY TO REQUIREMENTS OF
PROFESSIONAL DILIGENCE)
must
satisfy
effect
test
MISLEADING
PRACTICES
AGGRESSIVE
PRACTICES
ACTIONS
OMISSIONS
BANNED PRACTICES
(31 SPECIFIC PRACTICES
BANNED IN ALL CIRCUMSTANCES)
deemed
effect

10. Explaining the Directive
Dialogue with stakeholders
Worked with business, enforcers and consumer groups on guidance and difficult areas
Workshops on enforcement
Consultations
Guidance
Illustrative (about 90 pages) gives example of unfair practices, and give short explanations
Now published in Interim format
Final version once Parliament approve Regulations

11. Explaining the Directive
Training – change in the regime
Training programme 40+ sessions to 2,200+ local authority officers
Training to other enforcers and Consumer Direct, Citizens Advice
Communications – making people aware
Work with trade associations
Press releases
Short guide for business
Presentations and advice

12. Enforcing the Directive
Who enforces?
Office of Fair Trading
203 local authority Trading Standards Departments
Specific department in Northern Ireland and arrangements for Scotland
Sectoral bodies (with civil powers only), including financial services, energy, communications, water, rail travel etc

13. Schedule 1 banned practices
Misuse of Codes; false endorsements/authorisations (1-4)
Misleading Availability (5-9 and 23)
Misleading Context or Effect (10-13, 15-18, )
Pyramid Schemes (14)
Prize Draws (19, 31)
Aggressive Sales (24-26, 28 and 30)
Unreasonable demands (27, 29)

14. Enforcing the Directive
Sanctions / Outcomes
Civil
Injunctions (also consultation, undertakings)
Breach of injunction – fines, prison
Criminal
Fines, prison
Compensation
Administrative action
Being considered as part of wider review of criminal enforcement

15. Enforcing the Directive
Method / Principles of enforcement
Formal action avoided if possible (consultation, advice, guidance, use of codes etc)
Focus is on ending the detriment to consumers
Where enforcement action is needed it:
Changes behaviour
Eliminates financial gain
Is appropriate and responsive
Is proportionate to the harm and nature
Restores harm where appropriate
Deters further non-compliance

16. Conduct
Effect
Reg 3
Contrary to the requirements of professional
diligence
AND
(Likely to) appreciably impair the average consumer's ability to make an informed decision A N D
(Likely to) cause the average consumer to take a transactional decision they would not have taken otherwise
Reg 5
False or deceptive statement in relation to a specific list of key factors
Reg 6
Omission of material information
Reg 7
Aggressive practice by harassment, coercion or undue influence
(Likely to) significantly impair the average consumer's freedom
of choice or conduct
Sched 1
One of 31 specified practices
DOES NOT APPLY
(No impairment/transactional decision tests)

17. Might the trader’s practice affect consumers?
START HERE
Yes
Is the trader’s practice prohibited outright (see list of 31 practices)?
Yes
Practice is
unfair
Might the trader’s practice affect consumers? No
Is the trader giving false information to, or deceiving, his customers? OR
Is he failing to give enough information about a product?*
Is he selling aggressively?
Does the practice cause, or might it
cause, an average
consumer to take a different decision in relation to a product?
Yes
Yes No No
Is the trader failing to act in accordance with the standards a reasonable person would expect?
Yes
Yes No No
Practice not caught
by CPRs
Practice is not unfair
*In certain situations (where an invitation to purchase is made) certain specified information must
always be provided.

18. The experience of the UK in implementing the Unfair Commercial Practices Directive
Andrew Hadley
Office of Fair Trading
United Kingdom