On 16th January 2023, the Lord Chief Justice handed down the Court of Appeal’s second judgment on the power of local authorities to prosecute consumer offences outside their own area, under the relatively new powers provided by Schedule 5 of the Consumer Rights Act 2015 (‘CRA 2015’). The Court had previously ruled that, for consumer offences, local authorities were not now bound by the local expediency test in section 222 of the Local Government Act 1972.
The National Trading Standards eCrime Unit, based at York, brought a prosecution against multiple defendants for conspiracy to defraud and money laundering in relation to the operation of bogus model agencies. At a preparatory hearing, a Crown Court Judge stayed the proceedings as an abuse of process on the basis that the local authority had no power to prosecute outside its area, despite paragraph 46(1) of Schedule 5 to the CRA 2015 which states that “a local weights and measures authority in England or Wales may bring proceedings for a consumer offence allegedly committed in a part of England or Wales which is outside that authority’s area”.
In August 2022, the Court of Appeal (R v AUH [2022] EWCA Crim 1113) firmly rejected that analysis holding that Paragraph 46 “confers a free-standing power to prosecute, unconstrained by section 222 of the 1972 Act” where “consumer offences” are prosecuted. See summary of judgment here.
In the second part of the appeal, heard in November 2022, the Court of Appeal considered whether the indicted offences of money laundering and conspiracy to defraud qualified as “consumer offences” under paragraph 46(2)(d) as offences “originating from an investigation into a breach of” the listed consumer legislation.
In an important decision for regulatory prosecutions, the Court of Appeal held that the offences of money laundering and conspiracy to defraud were consumer offences. In the judgment of the Lord Chief Justice on the meaning of “originating from an investigation”, it was stated:
“in our view, Mr Kirk was correct to submit that the phrase “an investigation into a breach of legislation etc.” is apt to accommodate the subject-matter of that investigation, that is to say, what is being investigated. The adjectival phrase “originating from” requires there to be some sort of connection between the particular consumer offence or offences being investigated and the further offence or offences which are revealed by the facts and matters being investigated. In this way, an investigation into alleged breaches of the Unfair Trading Regulations may reveal that what may be described as typical consequential offences – for example, money laundering – have been committed. Equally, an investigation into moneylending may reveal that violence or intimidation has been used or threatened to enforce repayment: that would also be within scope as originating from the underlying offence. Conversely, an identical investigation which revealed unconnected offending (e.g. interrogation of a mobile phone revealing photographs of child cruelty) would not be within scope” [24].
The case will now continue to trial in the Crown Court.
The full judgment can be read here: R v AUH
Jonathan Kirk KC, Cameron Crowe and Sabrina Goodchild acted in the York case for the National Trading Standards ECrime Unit based in York.