High Court holds that a purchase by a TSO falls within CPUT

On 9th November 2018, the High Court handed down Judgment in Warwickshire County Council v Halfords Autocentres Limited [2018] EWHC 3007 (Admin), allowing the appeal of the Council.

A Trading Standards Officer (“TSO”) of the Appellant (“A”) undertook a “test purchase” of a full vehicle service offered by a garage of the Respondent (“R”). On collection, the TSO was given an invoice which indicated that a full service had been performed. The same vehicle was then re-examined by an independent motor engineer, and various faults were noted as being neither rectified nor reported. An information was laid that R had engaged in a commercial practice which was a misleading action in giving false information regarding a service, contrary to Reg 9 of the CPUT Regulations 2008/1277 (“2008 Regulations”). It was accepted that the invoice contained a misrepresentation, that giving it was an act and that it would have led an average consumer to pay the invoice and to pay for work that had not been done, but it was contended that the TSO was not a consumer and so the 2008 Regulations should not apply.

The case was initially dismissed on the basis that the TSO was not a consumer and that the definition of a consumer in Reg 2(1) of the 2008 Regulations could not be interpreted to include a TSO.

Allowing the appeal and quashing the order of the DDJ, Lord Justice Hickinbottom held that a commercial practice for the purposes of Reg 2(1) of the 2008 Regulations may be constituted by or derived from a test purchase made of a product (including a service) that is generally promoted to and intended for purchase by consumers, even where the purchaser may not himself be a consumer. The decision turned not on the definition of a consumer but on the true meaning of “commercial practice” and whether, in all the circumstances, the giving of the false invoice to the TSO was an act and representation that was “directly connected with the promotion, sale and supply of a product to consumers”.

Considering X Ltd [2013] EWCA Crim 818, LJ Hickinbottom noted that the Directive as a whole must be considered and that it is targeted at commercial practices or systems and not individual commercial transactions. His detailed reasoning included the following:

  1. That unlike elsewhere in the 2008 regime, the definition of “commercial practice” does not include an express requirement of a connection between a consumer and a particular transaction;
  2. That Reg 20 of the 2008 Regulations (now para 21 Sch 5 CRA 2015) gave an enforcement authority such as the council the power to make test purchases, and that it would be curious if the same legislation defined “commercial practices” in such a way as to preclude acts and representations within the context of those test purchases;
  3. That the requirement is that the relevant act be directly connected “with the promotion, sale or supply of a product to consumers” (rather than “a consumer”) and that the focus is upon practices that bear a direct connection with consumers in the broad sense;
  4. That the availability of the due diligence defence suggests that CPUT is a regulatory scheme in which criminal sanctions are directed at systemic defects.

LJ Hickinbottom did not need to decide whether a TSO was a consumer, but as obiter, he suggested that the DDJ was correct to distinguish a TSO from a consumer. He also refused the application for a reference to the CJEU on the basis that the construction of the above phrase was clear when a purposive approach is taken.