Trading standards body warns of reduced consumer confidence plus additional burdens and greater risk of legal challenges for councils if government pursues common law approach to regulation

A Government proposal for the adoption of a less-codified, common law approach to regulation would add burdens to local authority regulators to provide advice and expose them to a greater risk of legal challenge, the Chartered Trading Standards Institute (CTSI) has warned.

The comments came in response to a Department for Business, Energy and Industrial Strategy consultation, Reforming the framework for better regulation, that closed on 1 October.

BEIS had said: “Our exit from the EU provides us with the opportunity to think boldly about how we regulate and for the first time in a generation, we have the freedom to conceive and implement rules that put the UK first. We will use this freedom to unlock cutting-edge technologies, unleash innovation, and propel start-up growth, levelling up every corner of the UK. This will be a crucial part of boosting our productivity and helping us bring the benefits of growth to the whole of our country.”

The consultation set out five principles that BEIS said would underpin the government’s approach to regulation, including the adoption of a sovereign approach: “the UK will use its freedoms to take a tailored approach to setting rules in a way that boosts growth and benefits the British people.”

In its response the CTSI said it acknowledged the need to help business, and the UK economy as a whole to build back better with business support a key element.

However, it added that it did not believe that a common law/case law approach would necessarily reduce burdens on business.

“Whilst this approach may be advantageous for larger businesses, it may result in increased costs and burdens to micro-businesses and SMEs in particular, who have less available resources for ongoing advice, support and legal interpretation and representation. A clear legal position with advice available from trading standards at a local level would support these types of businesses who are aiming for compliance but may not have the resources to understand and implement the legal requirements. The drive to find ways to simplify business compliance must be considered in the round, together with the impacts on regulators and consumers.”

The CTSI continued: “In terms of regulation, a common law/case law approach would add burdens to local authority regulators to provide advice, and ensuring advice is consistent at a local level may prove difficult. We have seen evidence of this during the COVID-19 pandemic, when there was no prescribed ‘price gouging’ offence and a range of advice was provided by local authorities.”

Local authorities may also face more risk of legal challenge and may be unwilling to proceed with cases or advise businesses due to the risk caused by uncertain legal territory and a lack of prescribed standards, it added.

The CTSI argued that effective trading standards was intrinsically linked to building back better, helping consumers feel confident and businesses to engage in fair transactions both in the UK and internationally.

It warned: “At present, trading standards and other regulators are witnessing increasing levels of consumer vulnerability in the UK over the last two years. The long tail of the economic and social consequences of the COVID-19 pandemic have caused extenuating circumstances for UK consumers and business and unfamiliar and uncertain territory in the trade of even the most basic of consumer goods and services. It would be our view that adding more uncertainty via a common law or case law approach to regulations could further exacerbate consumer vulnerability and business instability.”

The CTSI pointed to indicators that there was a lack of confidence among UK consumers about the consumer protection system. “A recent CTSI Consumer Confidence Survey found that 56% of consumers believe that current consumer protection laws are unfit for stopping negative experiences. Further, 51% said that public services protecting consumers from scams are underfunded. These are indicators that the first line of consumer protection in the UK is failing and this needs to be addressed. We do not believe that adopting a common law/case law approach will increase consumer confidence and in fact it may cause increased risk to consumers, with adverse experiences sapping consumer confidence.”

The CTSI said the specific risks likely lie most in areas with current technical standards, for example, product safety, construction products, food products, and animal health and welfare. “As a practical example, currently toy safety regulations require compliance with standard EN71. If this were to be replaced with a general principle that all toys should be safe, with no reference to relevant standards, and left it to the Courts to determine, there is then no base line for manufacturers and importers to operate, leaving more room for rogues to step in.”

It added: “From experience of trading standards staff who advise businesses, codification gives certainty to businesses. We know that businesses want things to be straight forward, plain and with obvious routes to comply. Trading Standards as a profession share this desire.”