News Business Crime & Financial Services 21st Oct 2022

Local authority powers to prosecute consumer offences (R v AUH and others)

Richard Heller considers the conjoined appeals in R (on the application of City of York Council) v AUH and others and R (Birmingham City Council) v BIY and ARA (Sec of State for Business Energy and Industrial Strategy intervening) (‘the York Case’ and ‘the Birmingham Case’), in which the Court of Appeal held that paragraph 46(1), Schedule 5 to the Consumer Rights Act 2015 (CRA 2015), provides a free-standing power to prosecute consumer offences arising outside a local authority’s geographical boundaries, without the need for reference to the expediency provision at Local Government Act 1972, s 222 (LGA 1972).

R (on the application of City of York Council) v AUH and others (Secretary of State for Business, Energy and Industrial Strategy intervening) [2022] EWCA Crim 1113

Sallie Bennett-Jenkins KC and Daniel Chadwick appeared for the first respondent in ‘the Birmingham Case’ appeal.

Lewis MacDonald appeared for the second respondent.


What are the practical implications of this case?

This important decision removes any doubt as to the effect of CRA 2015, Sch 5, para 46(1) on the powers enjoyed by local weights and measures authorities (or in common parlance, Trading Standards) when investigating and prosecuting consumer offences. Challenges to the exercise of a prosecuting local authority’s discretion under LGA 1972, s 222 are, broadly-speaking, unaffected by this judgment.

It is however, apparent from the judgment that other matters still fail to be determined, so it remains to be seen whether the court will resolve points which might impact on the exercise of other ancillary investigative or prosecutorial powers. Of most potential interest in respect of these larger scale consumer prosecutions is whether one of the outstanding matters concerns the decision in the York Case to prosecute conspiracy to defraud and whether the power to do so arises under CRA 2015, Sch 5, para 46(2)(d) as ‘an offence originating from an investigation into a breach of legislation mentioned in paragraph (a), (b) or (c)’. Any decision to the contrary could emasculate the enforcement powers of National Trading Standards.

What was the background?

The appeals were a result of conflicting rulings made at preparatory hearings concerning the reach of local authority powers under CRA 2015.

The York Case concerns a prosecution of 14 defendants for conspiracy to defraud in relation to the operation of what is alleged to be a bogus model agency which took money from aspiring models using high pressure sales techniques. The City of York had investigated some of the allegations itself and taken over an extant investigation by Bristol City Council.

The Birmingham Case involves allegations of illegal money lending against two accused who it is alleged did not have the requisite licence to operate a consumer credit business.

In both cases, the defendants argued in the Crown Court that the proceedings were an abuse of process. The judge hearing the York Case agreed; the judge hearing the Birmingham Case did not.

CRA 2015, Sch 5, para 46(1) provides that:

‘A local weights and measures authority in England or Wales may bring proceedings for a consumer offence allegedly committed in a part of England or Wales which is outside that authority’s area.’

The meaning of ‘consumer offence’ is defined by CRA 2015, Sch 5, para 46(2) and is restricted to offences arising out of certain specified provisions in CRA 2015.

LGA 1972, s 222 provides that:

‘…(1) Where a local authority consider it expedient for the promotion or protection of the interests of the inhabitants of their area-

(a) they may prosecute or defend or appear in any legal proceedings and, in the case of civil proceedings, may institute them in their own name…’

In the York Case, the judge ruled that the proceedings were an abuse of process as the expediency test at LGA 1972, s 222 had not been met.

In the Birmingham Case, the judge ruled that even though the expediency test had not been met, the authority nevertheless enjoyed the power to prosecute under the relevant provisions of CRA 2015.

What did the court decide?

The court held that the clear words of CRA 2015, Sch 5, para 46(1) permit a local weights and measures authority to prosecute consumer offences committed outside its area without the need to satisfy the local expediency test at LGA 1972, s 222.

The court had regard to the pre-legislative history to CRA 2015 in finding that Parliament was free to legislate to provide powers which were unfettered by the constraints of LGA 1972, s 222CRA 2015, Sch 5, para 46(1) is just such an express power and free-standing to the general power enshrined by the local expediency test. The court rejected the argument of the respondents in the York Case that there is a material difference between the meaning of ‘bring proceedings’ at CRA 2015, Sch 5, para 46(1)and ‘may prosecute’ at LGA 1972, s 222.

The court made clear that LGA 1972, s 222 is not the only source of a local authority’s power to prosecute and should not be interpreted as qualifying legislation which provides specific powers.

Case details

  1. Court: Court of Appeal, Criminal Division
  1. Judges: Lord Burnett CJ, Mr Justice Jeremy Baker and Mrs Justice Cutts
  1. Date of judgment: 9 August 2022

 


This article was first published by LexisNexis on the 19th October 2022.

Richard is a member of the Lexis PSL Consulting Editorial Board for Corporate Crime.


Categories: News