Consumer Rights Bill (HC Bill 3)

Section 79

SCHEDULE 7 Enterprise Act 2002: enhanced consumer measures and other enforcement

1 Part 8 of the Enterprise Act 2002 (enforcement of certain consumer
legislation) is amended as follows.

2 5In section 210 (consumers), omit subsection (5).

3 (1) Section 211 (domestic infringements) is amended as follows.

(2) In subsection (1)(c), omit “in the United Kingdom”.

(3) After subsection (1) insert—

“(1A) But an act or omission which satisfies the conditions in subsection (1)
10is a domestic infringement only if at least one of the following is
satisfied—

(a) the person supplying (or seeking to supply) goods or services
has a place of business in the United Kingdom, or

(b) the goods or services are supplied (or sought to be supplied)
15to or for a person in the United Kingdom (see section 232).”

4 In section 213(5A) (CPC enforcers), for paragraph (i) substitute—

“(i) an enforcement authority within the meaning of section
120(15) of the Communications Act 2003 (regulation of
premium rate services);”.

5 (1) 20Section 214 (consultation) is amended as follows.

(2) In subsection (4)(a), after “14 days” insert “or, where subsection (4A) applies,
28 days”.

(3) After subsection (4) insert—

“(4A) This subsection applies where the person against whom the
25enforcement order would be made is a member of, or is represented
by, a representative body, and that body operates a consumer code
which has been approved by—

(a) an enforcer, other than a designated enforcer which is not a
public body,

(b) 30a body which represents an enforcer mentioned in paragraph
(a),

(c) a group of enforcers mentioned in paragraph (a), or

(d) a community interest company whose objects include the
approval of consumer codes.

(4B) 35In subsection (4A)—

• “consumer code” means a code of practice or other document
  (however described) intended, with a view to safeguarding
  or promoting the interests of consumers, to regulate by any
  means the conduct of persons engaged in the supply of goods
  40or services to consumers (or the conduct of their employees
  or representatives), and

• “representative body” means an organisation established to
  represent the interests of two or more businesses in a

  Consumer Rights BillPage 101

  particular sector or area, and for this purpose “business” has
  the meaning it bears in section 210.”

6 In section 217 (enforcement orders), after subsection (10) insert—

“(10A) An enforcement order may require a person against whom the order
5is made to take enhanced consumer measures (defined in section
219A) within a period specified by the court.

(10B) An undertaking under subsection (9) may include a further
undertaking by the person to take enhanced consumer measures
within a period specified in the undertaking.

(10C) 10Subsections (10A) and (10B) are subject to section 219C in a case
where the application for the enforcement order was made by a
designated enforcer which is not a public body.

(10D) Where a person is required by an enforcement order or an
undertaking under this section to take enhanced consumer
15measures, the order or undertaking may include requirements as to
the provision of information or documents to the court by the person
in order that the court may determine if the person is taking those
measures.”

7 In section 219 (undertakings), after subsection (5) insert—

“(5ZA) 20An undertaking under this section may include a further
undertaking by the person—

(a) to take enhanced consumer measures (defined in section
219A) within a period specified in the undertaking, and

(b) where such measures are included, to provide information or
25documents to the enforcer in order that the enforcer may
determine if the person is taking those measures.

(5ZB) Subsection (5ZA) is subject to section 219C in a case where the
enforcer is a designated enforcer which is not a public body.”

8 After section 219 insert—

“219A 30 Definition of enhanced consumer measures

(1) In this Part, enhanced consumer measures are measures (not
excluded by subsection (5)) falling within—

(a) the redress category described in subsection (2),

(b) the compliance category described in subsection (3), or

(c) 35the choice category described in subsection (4).

(2) The measures in the redress category are—

(a) measures offering compensation or other redress to
consumers who have suffered loss as a result of the conduct
which has given rise to the enforcement order or
40undertaking,

(b) where the conduct referred to in paragraph (a) relates to a
contract, measures offering such consumers the option to
terminate (but not vary) that contract,

(c) where such consumers cannot be identified, or cannot be
45identified without disproportionate cost to the subject of the

enforcement order or undertaking, measures intended to be
in the collective interests of consumers.

(3) The measures in the compliance category are measures intended to
prevent or reduce the risk of the occurrence or repetition of the
5conduct to which the enforcement order or undertaking relates
(including measures with that purpose which may have the effect of
improving compliance with consumer law more generally).

(4) The measures in the choice category are measures intended to enable
consumers to choose more effectively between persons supplying or
10seeking to supply goods or services.

(5) The following are not enhanced consumer measures—

(a) a publication requirement included in an enforcement order
as described in section 217(8),

(b) a publication requirement included in an undertaking
15accepted by the court as described in section 217(10), or

(c) a publication requirement included in an undertaking
accepted by a CPC enforcer as described in section
219(5A)(a).

219B Inclusion of enhanced consumer measures etc.

(1) 20An enforcement order or undertaking may include only such
enhanced consumer measures as the court or enforcer (as the case
may be) considers to be just and reasonable.

(2) For the purposes of subsection (1) the court or enforcer must in
particular consider whether any proposed enhanced consumer
25measures are proportionate, taking into account—

(a) the likely benefit of the measures to consumers,

(b) the costs likely to be incurred by the subject of the
enforcement order or undertaking, and

(c) the likely cost to consumers of obtaining the benefit of the
30measures.

(3) The costs referred to in subsection (2)(b) are—

(a) the cost of the measures, and

(b) the reasonable administrative costs associated with taking
the measures.

(4) 35An enforcement order or undertaking may include enhanced
consumer measures in the redress category—

(a) only in a loss case, and

(b) only if the court or enforcer (as the case may be) is satisfied
that the cost of such measures to the subject of the
40enforcement order or undertaking is unlikely to be more than
the sum of the losses suffered by consumers as a result of the
conduct which has given rise to the enforcement order or
undertaking.

(5) The cost referred to in subsection (4)(b) does not include the
45administrative costs associated with taking the measures.

(6) Subsection (7) applies if an enforcement order or undertaking
includes enhanced consumer measures offering compensation and a

settlement agreement is entered into in connection with the payment
of compensation.

(7) A waiver of a person’s rights in the settlement agreement is not valid
if it is a waiver of the right to bring civil proceedings in respect of
5conduct other than the conduct which has given rise to the
enforcement order or undertaking.

(8) The following definitions apply for the purposes of subsection (4)(a).

(9) In the case of an enforcement order or undertaking under section
217, “a loss case” means a case in which—

(a) 10subsection (1) of that section applies (a finding that a person
has engaged in conduct which constitutes an infringement),
and

(b) consumers have suffered loss as a result of that conduct.

(10) In the case of an undertaking under section 219, “a loss case” means
15a case in which—

(a) subsection (3)(a) or (b) of that section applies (a belief that a
person has engaged or is engaging in conduct which
constitutes an infringement), and

(b) consumers have suffered loss as a result of that conduct.

219C 20Availability of enhanced consumer measures to private enforcers

(1) An enforcement order made on the application of a designated
enforcer which is not a public body may require a person to take
enhanced consumer measures only if the following conditions are
satisfied.

(2) 25An undertaking given under section 217(9) following an application
for an enforcement order made by a designated enforcer which is not
a public body, or an undertaking given to such an enforcer under
section 219, may include a further undertaking by a person to take
enhanced consumer measures only if the following conditions are
30satisfied.

(3) The first condition is that the enforcer is specified for the purposes of
this section by order made by the Secretary of State.

(4) The second condition is that the enhanced consumer measures do
not directly benefit the enforcer or an associated undertaking.

(5) 35Enhanced consumer measures which directly benefit an enforcer or
an associated undertaking include, in particular, measures which—

(a) require a person to pay money to the enforcer or associated
undertaking,

(b) require a person to participate in a scheme which is designed
40to recommend persons supplying or seeking to supply goods
or services to consumers and which is administered by the
the enforcer or associated undertaking, or

(c) would give the enforcer or associated undertaking a
commercial advantage over any of its competitors.

(6) 45The Secretary of State may make an order under subsection (3)
specifying an enforcer only if the Secretary of State is satisfied that to
do so is likely to—

(a) improve the availability to consumers of redress for
infringements to which the enforcer’s designation relates,

(b) improve the availability to consumers of information which
enables them to choose more effectively between persons
5supplying or seeking to supply goods or services, or

(c) improve compliance with consumer law.

(7) The Secretary of State may make an order under subsection (3)
specifying an enforcer only if the functions of the enforcer under this
Part have been specified under section 24 of the Legislative and
10Regulatory Reform Act 2006 (functions to which principles under
section 21 and code of practice under section 22 apply), to the extent
that they are capable of being so specified.

(8) The power to make an order under subsection (3)—

(a) is exercisable by statutory instrument subject to annulment in
15pursuance of a resolution of either House of Parliament;

(b) includes power to make incidental, supplementary,
consequential, transitional, transitory or saving provision.

(9) Subsection (10) applies if—

(a) an enforcer exercises a function in relation to a person by
20virtue of subsection (1) or (2),

(b) that function is a relevant function for the purposes of Part 2
(co-ordination of regulatory enforcement) of the Regulatory
Enforcement and Sanctions Act 2008, and

(c) a primary authority (within the meaning of that Part) has
25given advice or guidance under section 27(1) of that Act—

(i) to that person in relation to that function, or

(ii) to other local authorities (within the meaning of that
Part) with that function as to how they should
exercise it in relation to that person.

(10) 30The enforcer must, in exercising the function in relation to that
person, act consistently with that advice or guidance.

(11) In this section “associated undertaking”, in relation to a designated
enforcer, means—

(a) a parent undertaking or subsidiary undertaking of the
35enforcer, or

(b) a subsidiary undertaking of a parent undertaking of the
enforcer,

and for this purpose “parent undertaking” and “subsidiary
undertaking” have the meanings given by section 1162 of the
40Companies Act 2006.”

9 (1) Section 220 (further proceedings) is amended as follows.

(2) After subsection (1) insert—

“(1A) This section does not apply in the case of a failure to comply with an
order or undertaking which consists only of a failure to provide
45information or documents required by the order or undertaking as
described in section 217(10D).”

(3) In subsection (2), for “In such a case the CMA” substitute “Any CPC
enforcer”.

(4) In subsection (5)—

(a) in the opening words, for “sections 215 and 217 or 218 (as the case
5may be)” substitute “sections 215, 217 or 218 (as the case may be) and
219A, 219B and 219C”,

(b) for paragraph (c) substitute—

“(c) section 217(9), (10), (10B) and (11) must be ignored, and
section 217(10C) and (10D) must be ignored to the extent that
10they relate to an undertaking under subsection (9);”,

(c) after paragraph (d) insert—

“(e) sections 219A, 219B and 219C must be ignored to the extent
that they relate to an undertaking under section 217(9) or
219.”

10 15In section 229 (advice and information), after subsection (1) insert—

“(1A) As soon as is reasonably practicable after the commencement of
Schedule 5 to the Consumer Rights Act 2014 (investigatory powers
etc.) the CMA must prepare and publish advice and information
with a view to—

(a) 20explaining the provisions of that Schedule, so far as they
relate to investigatory powers exercised for the purposes set
out in paragraphs 13(2) and (3) and 19 of that Schedule, to
persons who are likely to be affected by them, and

(b) indicating how the CMA expects such provisions to operate.”

Section 80

25SCHEDULE 8 Private actions in competition law

Part 1 Competition Act 1998

1 The Competition Act 1998 is amended in accordance with this Part.

2 30For the heading of Chapter 4 of Part 1, substitute “Appeals, proceedings
before the Tribunal and settlements relating to infringements of competition
law”.

3 For the cross-heading preceding section 46, substitute “Appeals and
proceedings before the Tribunal”.

4 (1) 35For section 47A substitute—

“47A Proceedings before the Tribunal: claims for damages etc.

(1) A person may make a claim to which this section applies in
proceedings before the Tribunal, subject to the provisions of this Act
and Tribunal rules.

(2) 40This section applies to a claim of a kind specified in subsection (3)
which a person who has suffered loss or damage may make in civil

proceedings brought in any part of the United Kingdom in respect
of an infringement decision or an alleged infringement of—

(a) the Chapter I prohibition,

(b) the Chapter II prohibition,

(c) 5the prohibition in Article 101(1), or

(d) the prohibition in Article 102.

(3) The claims are—

(a) a claim for damages;

(b) any other claim for a sum of money;

(c) 10in proceedings in England and Wales or Northern Ireland, a
claim for an injunction.

(4) For the purpose of identifying claims which may be made in civil
proceedings, any limitation rules or rules relating to prescription that
would apply in such proceedings are to be disregarded.

(5) 15The right to make a claim in proceedings under this section does not
affect the right to bring any other proceedings in respect of the claim.

(6) In this Part (except in section 49C) “infringement decision” means—

(a) a decision of the CMA that the Chapter I prohibition, the
Chapter II prohibition, the prohibition in Article 101(1) or the
20prohibition in Article 102 has been infringed,

(b) a decision of the Tribunal on an appeal from a decision of the
CMA that the Chapter I prohibition, the Chapter II
prohibition, the prohibition in Article 101(1) or the
prohibition in Article 102 has been infringed, or

(c) 25a decision of the Commission that the prohibition in Article
101(1) or the prohibition in Article 102 has been infringed.”

(2) Section 47A of the Competition Act 1998 (as substituted by sub-paragraph
(1)) applies to claims arising before the commencement of this paragraph as
it applies to claims arising after that time.

5 (1) 30For section 47B substitute—

“47B Collective proceedings before the Tribunal

(1) Subject to the provisions of this Act and Tribunal rules, proceedings
may be brought before the Tribunal combining two or more claims
to which section 47A applies (“collective proceedings”).

(2) 35Collective proceedings must be commenced by a person who
proposes to be the representative in those proceedings.

(3) The following points apply in relation to claims in collective
proceedings—

(a) it is not a requirement that all of the claims should be against
40all of the defendants to the proceedings,

(b) the proceedings may combine claims which have been made
in proceedings under section 47A and claims which have not,
and

(c) a claim which has been made in proceedings under section
4547A may be continued in collective proceedings only with the
consent of the person who made that claim.

(4) Collective proceedings may be continued only if the Tribunal makes
a collective proceedings order.

(5) The Tribunal may make a collective proceedings order only—

(a) if it considers that the person who brought the proceedings is
5a person who, if the order were made, the Tribunal could
authorise to act as the representative in those proceedings in
accordance with subsection (8), and

(b) in respect of claims which are eligible for inclusion in
collective proceedings.

(6) 10Claims are eligible for inclusion in collective proceedings only if the
Tribunal considers that they raise the same, similar or related issues
of fact or law and are suitable to be brought in collective proceedings.

(7) A collective proceedings order must include the following matters—

(a) authorisation of the person who brought the proceedings to
15act as the representative in those proceedings,

(b) description of a class of persons whose claims are eligible for
inclusion in the proceedings, and

(c) specification of the proceedings as opt-in collective
proceedings or opt-out collective proceedings (see
20subsections (10) and (11)).

(8) The Tribunal may authorise a person to act as the representative in
collective proceedings—

(a) whether or not that person is a person falling within the class
of persons described in the collective proceedings order for
25those proceedings (a “class member”), but

(b) only if the Tribunal considers that it is just and reasonable for
that person to act as a representative in those proceedings.

(9) The Tribunal may vary or revoke a collective proceedings order at
any time.

(10) 30“Opt-in collective proceedings” are collective proceedings which are
brought on behalf of each class member who opts in by notifying the
representative, in a manner and by a time specified, that the claim
should be included in the collective proceedings.

(11) “Opt-out collective proceedings” are collective proceedings which
35are brought on behalf of each class member except—

(a) any class member who opts out by notifying the
representative, in a manner and by a time specified, that the
claim should not be included in the collective proceedings,
and

(b) 40any class member who—

(i) is not domiciled in the United Kingdom at a time
specified, and

(ii) does not, in a manner and by a time specified, opt in
by notifying the representative that the claim should
45be included in the collective proceedings.

(12) Where the Tribunal gives a judgment or makes an order in collective
proceedings, the judgment or order is binding on all represented
persons, except as otherwise specified.

(13) The right to make a claim in collective proceedings does not affect the
right to bring any other proceedings in respect of the claim.

(14) In this section and in section 47C, “specified” means specified in a
direction made by the Tribunal.”

(2) 5Section 47B of the Competition Act 1998 (as substituted by sub-paragraph
(1)) applies to claims arising before the commencement of this paragraph as
it applies to claims arising after that time.

6 After section 47B (as substituted by paragraph 5) insert—

“47C Collective proceedings: damages and costs

(1) 10The Tribunal may not award exemplary damages in collective
proceedings.

(2) The Tribunal may make an award of damages in collective
proceedings without undertaking an assessment of the amount of
damages recoverable in respect of the claim of each represented
15person.

(3) Where the Tribunal makes an award of damages in opt-out collective
proceedings, the Tribunal must make an order providing for the
damages to be paid on behalf of the represented persons to—

(a) the representative, or

(b) 20such person other than a represented person as the Tribunal
thinks fit.

(4) Where the Tribunal makes an award of damages in opt-in collective
proceedings, the Tribunal may make an order as described in
subsection (3).

(5) 25Subject to subsection (6), where the Tribunal makes an award of
damages in opt-out collective proceedings, any damages not claimed
by the represented persons within a specified period must be paid to
the charity for the time being prescribed by order made by the Lord
Chancellor under section 194(8) of the Legal Services Act 2007.

(6) 30In a case within subsection (5) the Tribunal may order that all or part
of any damages not claimed by the represented persons within a
specified period is instead to be paid to the representative in respect
of all or part of the costs or expenses incurred by the representative
in connection with the proceedings.

(7) 35The Secretary of State may by order amend subsection (5).

(8) A damages-based agreement is unenforceable if it relates to opt-out
collective proceedings.

(9) In this section—

(a) “damages” (except in the term “exemplary damages”)
40includes any sum of money which may be awarded by the
Tribunal in collective proceedings (other than costs or
expenses);

(b) “damages-based agreement” has the meaning given in
section 58AA(3) of the Courts and Legal Services Act 1990.”

7 After section 47C (inserted by paragraph 6) insert—

“47D Proceedings under section 47A or collective proceedings: injunctions
etc.

(1) An injunction granted by the Tribunal in proceedings under section
547A or in collective proceedings—

(a) has the same effect as an injunction granted by the High
Court, and

(b) is enforceable as if it were an injunction granted by the High
Court.

(2) 10In deciding whether to grant an injunction in proceedings under
section 47A or in collective proceedings, the Tribunal must—

(a) in proceedings in England and Wales, apply the principles
which the High Court would apply in deciding whether to
grant an injunction under section 37(1) of the Senior Courts
15Act 1981, and

(b) in proceedings in Northern Ireland, apply the principles that
the High Court would apply in deciding whether to grant an
injunction.

(3) Subsection (2) is subject to Tribunal rules which make provision of
20the kind mentioned in paragraph 15A(3) of Schedule 4 to the
Enterprise Act 2002 (undertakings as to damages in relation to claims
subject to the fast-track procedure).”

8 (1) After section 47D (inserted by paragraph 7) insert—

“47E Limitation or prescriptive periods for proceedings under section 47A
25and collective proceedings

(1) Subsection (2) applies in respect of a claim to which section 47A
applies, for the purposes of determining the limitation or
prescriptive period which would apply in respect of the claim if it
were to be made in—

(a) 30proceedings under section 47A, or

(b) collective proceedings at the commencement of those
proceedings.

(2) Where this subsection applies—

(a) in the case of proceedings in England and Wales, the
35Limitation Act 1980 applies as if the claim were an action in a
court of law;

(b) in the case of proceedings in Scotland, the Prescription and
Limitation (Scotland) Act 1973 applies as if the claim related
to an obligation to which section 6 of that Act applies;

(c) 40in the case of proceedings in Northern Ireland, the Limitation
(Northern Ireland) Order 1989 applies as if the claim were an
action in a court established by law.

(3) Where a claim is made in collective proceedings at the
commencement of those proceedings (“the section 47B claim”),
45subsections (4) to (6) apply for the purpose of determining the
limitation or prescriptive period which would apply in respect of the
claim if it were subsequently to be made in proceedings under
section 47A.