Appeal - Engaging in misleading commercial practice

R v Scottish and Southern Energy plc: Court of Appeal, Criminal Division (Lord Justice Davis, Mr Justice Nicol and Judge Kramer QC): 16 March 2012

Section 2(1) of the Consumer Protection from Unfair Trading Regulations 2008, SI 2008/1277 provides, so far as material: 'In these regulations... "commercial practice" means any act, omission, course of conduct, representation or commercial communication (including advertising and marketing) by a trader, which is directly connected with the promotion, sale or supply of a product to or from consumers, whether occurring before, during or after a commercial transaction (if any) in relation to a product;... "trader" means any person who in relation to a commercial practice is acting for purposes relating to his business, and anyone acting in the name of or on behalf of a trader... .'

The victim lived in an area which had been designated by the local authority as a 'no cold-calling zone'. One morning in February 2009, the victim was at his home when the doorbell rang. The victim answered the door and found a man, P, with a card identifying him as being from 'Southern Electric'. P was an employee of a company, S Ltd, who had been trained by that company as a door-to-door salesman. That training (the training) required him to speak from, and adhere to, a sales script which he had learned by heart.

The victim talked to P for a few minutes and subsequently alleged that he had said that he was not interested, but that P would not leave. The victim's daughter, W, subsequently told P that it was a no cold-call area and asked him to leave. P left and W reported the incident to J, a community safety warden in the area (the complaint). J confronted P and P's supervisor subsequently called to apologise to W. The matter was referred to trading standards which entered into communication about it with what they understood to be the defendant company.

The defendant company was a holding company which was not itself a trading company. It had a significant number of subsidiary companies, of which one was S Ltd and another was SSE Services plc. S Ltd was itself a trading company which had a number of trading subsidiaries. In terms of corporate governance and assumption of responsibilities, there was a schedule of matters reserved for the board of the defendant company. Further, there was evidence that the training had been done with the involvement of, and under the ultimate supervision and control of, the defendant company. In due course, proceedings under the Consumer Protection from Unfair Trading Regulations 2008, SI 2008/1277 (the 2008 regulations) were commenced against the defendant and P.

At the plea and case management hearing the point was raised that the correct corporate defendant should have been S Ltd which had employed and trained P. If that was correct, then it was by then too late, by virtue of the time limit for prosecution, stipulated by the 2008 regulations, to commence proceedings against S Ltd. Prior to trial, the defendant applied for a dismissal or a stay on the basis that, under the provisions of the 2008 regulations, it had no case to answer as it was not a 'relevant trader' for the purposes of the 2008 regulations. The application was rejected (the ruling).

The defendant was convicted of two counts of engaging in a misleading commercial practice contrary to regulation 9 of the 2008 regulations (counts 6 and 7) and was acquitted on five other counts on the indictment charged by reference to the 2008 regulations (counts 1 to 5). The defendant appealed against conviction.

The defendant submitted, inter alia, that: (i) the ruling was incorrect; (ii) the judge had failed to direct the jury properly as to the considerations they needed to address in deciding whether or not the defendant was the relevant trader; (iii) the judge had misdirected the jury as to whether P was an agent for the defendant; (iv) the judge had misdirected the jury as to whether a 'transactional decision' had been caused or had been likely to be caused by the alleged misleading practice; and (v) the judge had failed to remind the jury sufficiently of the defence case. As to (v), the defendant submitted, inter alia, that the summing up had been unbalanced. The appeal would be dismissed.

(1) In relation to the definition of 'trader' in the 2008 regulations, the words 'any', 'in relation to', 'acting' and 'relating to' were all words of width and elasticity. As to the definition of 'commercial practice', that was likewise broadly framed. It was amply sufficient to cover involvement in or supervision or control of training, in appropriate circumstances, as being directly connected with the promotion or sale of supply of a product. It was also to be noted that the definition of 'commercial practice' carefully avoided saying that the promotion, sale or supply had to be made by the trader itself (see [34] of the judgment).

On the facts of the instant case and given the breadth of the definitions of 'trader' and 'commercial practice' under the 2008 regulations, the ruling had been a justified one. The evidence had been there, in the circumstances of the case, to show that the defendant had been capable of being a 'trader' for the purpose of the 2008 regulations. Such a 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 read corporate veils. On the contrary, it gave effect to the broad wording of, and purposive approach required to be applied to, the 2008 regulations. It was too narrow an approach to the 2008 regulations to say that because the sale force had been directly employed and directly trained by S Ltd, there could not have been any designation of the defendant company as a 'trader' under the 2008 regulations (see [33], [35] of the judgment).

(2) On the facts of the instant case, the judge had sufficiently summed up to the jury the considerations they needed to address in deciding whether or not the defendant was the relevant trader (see [38] of the judgment). (3) On the facts of the instant case, although references to agency were contained in the indictment, it might perhaps have been better if, before the jury, the judge had steered clear of delving into that concept; after all, the words in regulation 2 of the 2008 regulations were 'in the name of or on behalf of the trader'. However, if anything, any confusion in that regard would have tended to favour the defendant. In any event, the specific reference to P being the 'agent' of the defendant had been contained in the particulars of offence for counts 1 to 5 which were all counts on which the defendant had been acquitted (see [42], [43] of the judgment).

(4) On the facts of the instant case, the judge had, inter alia, set out the elements required to be proved in relation to the 'transitional decision' element of the offence, quoting almost verbatim from the 2008 regulations during the summing up and elsewhere going through the various counts. That had been amply sufficient (see [45], [46] of the judgment).

(5) On the facts of the instant case, the defence case had been sufficiently put to the jury and the summing up was not unbalanced or unfair (see [51] of the judgment). The court was not satisfied that the conviction was unsafe. Accordingly, the appeal would be dismissed (see [52] of the judgment).

Andrew Mitchell QC and Jonathan Goulding (instructed by SSE Services plc) for the defendant; Nicholas Haggan QC and Timothy Moores (instructed by Surrey Trading Standards) for the Crown.