A guide for businesses covering the requirements of Trading Standards law and some suggestions to help your business avoid prosecution. This guide has been prepared to help businesses meet the requirements of Trading Standards law. Although not exhaustive the guide seeks to cover the concepts of:
It is based on the best information currently available. Every effort has been made to ensure the accuracy of this guide, however in every instance it is the Courts which decide if the law has been broken. It is recommended that you take advice on what is likely to constitute due diligence in any particular situation.
Trading Standards or Consumer Protection legislation aims to create equity; a balance that ensures adequate protection for consumers, while promoting and maintaining a fair trading environment for legitimate business.
In many criminal cases, the prosecution also has to prove "mens rea" or guilty knowledge. They must show an intention to do something wrong. HOWEVER some laws create a number of offences that simply contain an absolute prohibition against doing something. In such cases it does not matter that you did not intend to do wrong OR were ignorant of requirements, the fact that you have contravened the law is sufficient to allow a Court to convict.
Therefore to balance the scales of justice, Parliament has provided various defences and "let outs" and it is these provisions that this leaflet examines. This means that the law is recognising the efforts made by businesses to comply with its demands. This system of "let outs" includes the defence of reasonable precautions and due diligence.
To use these defences, a person must prove that he took all reasonable steps and exercised all due diligence to avoid committing the offence. If he can do so he is entitled to be acquitted. Whether or not a defence will be successful depends on the circumstances surrounding each case. What amounts to a successful due diligence defence has exercised the minds of many judges over many years and has resulted in a number of appeal cases which in themselves help us to understand more clearly what businesses have to do to avoid prosecution.
The form of wording for this type of defence is common to most Consumer Protection laws.
It generally requires a business or person to:
At its simplest, it means that you have looked at the way in which your business operates and put in place a series of checks to prevent any problems occurring. Once you have done this you must ensure that the system of checks is being carried out. If you have a system that nobody knows about, or cares about, the system is useless and any defence plea will usually fail.
None of the laws that provide a "due diligence" defence describe in any detail what systems will satisfy the defence. To establish this point you need to examine the past decisions of the courts and draw upon that experience, but before you can set up any systems you need to know what you can and cannot do.
Once you know what is prohibited you can build your defences.
To assist you in this task, some of the following themes have been extracted from past court decisions:
A classic case involved the sale of a watch described as "waterproof" and a "divers watch". In court the judge asked why no checks had been carried out by the retailer, such as placing the watch in a bowl of water. This simple test would have revealed that the watch was not waterproof and could have avoided expensive litigation.
Taking reasonable steps is likely to involve setting up a system of control that has due regard to the risks and the law involved.
One of the clearest messages from the courts about reasonable precautions and due diligence is that size does matter.
The size of the business and the amount of risk associated with the product are some of the factors that help to determine what are "reasonable steps". For example, the absence of documented systems in larger companies might be fatal.
What will not be taken into account are factors like ignorance of the law, poor command of a language or a lack of common sense.
After 30 years of deliberation, the Courts have yet to come up with a simple scheme to answer the often asked question of what is reasonable? This is not surprising when you consider the diversity of consumer products and services in modern society. You may find some help on this subject area by reading publications on risk assessment, hazard analysis and quality assurance. There is also a vast body of case law (decided Court cases) relating to the due diligence concept available, although it is not often user friendly. Without doubt, one of the best sources of information available lies within Trading Standards. Officers are employed to assist local businesses as well as consumers and you are urged to seek their advice
What follows are some pointers and examples of control techniques. They are not prescriptive and are intended to make you think about protecting yourself against legal action.
What could go wrong in your business that might mean a Court appearance? Buying and selling stolen goods, handling stolen goods for repair?
To assess the risk of such an incident, you should identify any weak links in the process chain. This requires you to analyse each stage of your operation and identify precautions. You should also know what is happening in your particular sector of industry and be aware of how and where your products are being used or marketed.
Having analysed what could go wrong, you should put in place reasonable safeguards.
You will need to use your judgement in deciding what is necessary and feasible. You should consider the following:
Any system that you devise must be appropriate to the size of your business. The bigger you are, the more the law will expect you to do.
The systems you create must be appropriate to the consequences of a failure e.g. if a stolen product was likely to be placed on the market, a thorough system of checks would be expected to be in place.
If sampling or testing is involved OR appropriate, the number of tests you do should reflect:
The points listed above are suggestions, when in doubt you should seek advice.
Creating a system of checks is not easy. The policy of the Trading Standards Service is to help local businesses wherever possible.
These notes are for guidance only and do not represent an authoritative interpretation of the law which can only be given by the Courts.
Whilst every effort to ensure that the advice you have received is accurate, the author cannot accept any liability whatsoever for any claims arising under any statute or common law.
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