Court of Appeal upholds conviction of major energy supplier after trading standards prosecution

The Court of Appeal has upheld the conviction of one of the ‘big six’ major energy suppliers for misleading potential customers.

The prosecution of Scottish and Southern Energy PLC was originally brought by Surrey County Council’s Trading Standards team.

The company was convicted at Guildford Crown Count in May 2011 of two counts of engaging in a misleading commercial practice contrary to regulation 9 of the Consumer Protection from Unfair Trading Regulations 2008. It was acquitted on five other counts.

The case revolved around a sales script used between September 2008 and July 2009.

Surrey County Council Trading Standards argued that the overall presentation of this script deceived or was likely to deceive the average consumer in a number of ways.

It was alleged that the script implied that the visit by the PLC’s representative was simply to explain about de-regulation and get the consumer crossed off a list and not bothered in that way again.

The two counts also said it was implied that the presentation was mostly about payment method and that all the consumer was committing to was getting a bill from a different office with a different logo, and applying for a discounted tariff rather than making it clear they were signing a binding contract to switch energy supplier.

In addition, it was claimed that the script implied that the salesperson was in possession of a printout of information about the consumer’s current energy supply and tariff and that they could get the consumer on a lower tariff and save the consumer money.

The prosecution was thought to be the first of its kind against one of the six largest energy suppliers.

Scottish and Southern Energy sought to overturn the original conviction on a number of grounds, namely that:

• The PLC was not the relevant trader for the purposes of the 2008 Regulations. SSE Energy Supply Ltd, which had trained the salesman, should have been the correct corporate defendant;
• The judge had failed to direct the jury as to the considerations they needed to address in deciding whether or not the PLC was the relevant trader;
• The judge had misdirected the jury as to whether Mr Pollak (the salesman) could be acting as agent for the PLC;
• The judge had misdirected the jury as to whether a “transactional” decision was caused or likely to be caused by the alleged misleading practice; and
• The judge had failed to remind the jury sufficiently of the defence case.

But in Surrey Trading Standards, R (on the application of) v Scottish and Southern Energy Plc [2012] EWCA Crim 539, the Court of Appeal rejected the PLC’s case.

Giving the judgment, Lord Justice Davis said the evidence was there, in the circumstances of the case, to show that the PLC was capable of being a ‘trader’ for the purpose of the 2008 Regulations.

The judge added that this conclusion did not do a disservice to the language of the 2008 Regulations or drive a coach and horses through conventional corporate structures or wrongly rend corporate veils. “On the contrary, it gives effect to the broad wording of, and purposive approach required to be applied to, the 2008 Regulations,” he said.

Lord Justice Davis also rejected all of Scottish and Southern Energy’s remaining submissions. In relation to the judge’s summing up, for example, the Court of Appeal decided that the defence case was sufficiently put to the jury and the summing up was not unbalanced or unfair.

“Considering the grounds advanced for this appeal both individually and cumulatively we are not persuaded that this conviction was unsafe,” Lord Justice Davis concluded.

Kay Hammond, Surrey County Council’s Cabinet Member for Community Safety, said: “This case shone a spotlight on the dubious practice of doorstep selling. Five of the big six energy firms have now stopped doing it because they recognise it’s not in the best interests of their businesses or their customers.”

Sentencing had been adjourned pending the disposal of the appeal.