Surrey Trading Standards, R (on the application of) v Scottish and Southern Energy Plc

A holding company may be a trader under the Consumer Protection from Unfair Trading Regulations 2008 even though it is not itself a trading company. The question is fact-sensitive. It depends on whether, in relation to the commercial practice, the company acted for purposes relating to its business, including through involvement in, supervision of, or control over sales training.

The statutory definitions are broad and purposive. More than one company may be a trader in relation to the same practice. A jury direction is sufficient where it identifies the statutory elements, leaves the corporate and defence cases fairly to the jury, and requires proof that the misleading practice caused or was likely to cause a transactional decision which otherwise would not have been taken.

The appellant holding company was convicted by a jury at Guilford Crown Court on two counts of engaging in a misleading commercial practice contrary to regulation 9 of the Consumer Protection from Unfair Trading Regulations 2008. The counts concerned the training and use of doorstep-sales Energy Scripts.

The sales representative was employed and trained by a wholly owned trading subsidiary. The appellant contended that it was not the relevant trader, that the jury had been misdirected on that issue and agency, and that the directions on transactional decisions and the defence case were inadequate.

The central issue was whether the evidence permitted the jury to find that the holding company was a trader in relation to the challenged commercial practice, and whether the convictions were safe.

1. Appeal dismissed. The convictions were safe. The judge correctly ruled that there was a case for the jury on whether the appellant was a trader, and the summing-up disclosed no material misdirection or unfairness.

2. The definition of trader in regulation 2 of the Consumer Protection from Unfair Trading Regulations 2008 is deliberately broad. A holding company need not itself be a trading company, employ the sales force, or hold an energy-supply licence in order to be capable of being a trader in relation to a commercial practice. The question depends on the particular facts.

3. There may be more than one trader in relation to the same activity. The fact that the trading subsidiary could have been prosecuted did not preclude prosecution of the holding company. Regulation 16(2) was consistent with that conclusion. Treating the holding company as a trader on the evidence did not disregard separate corporate personality, pierce the corporate veil, or imply that it had unlawfully supplied energy without a licence.

4. There was evidence from which the jury could find that the appellant had ultimate involvement in, supervision of, and control over the training and Energy Scripts. That evidence included the board's reserved responsibility for group management, regulatory compliance and group policies, together with correspondence issued in the appellant's name. Such involvement could be directly connected with the promotion, sale or supply of a product and so constitute a commercial practice.

5. The directions sufficiently identified the alleged practice and the separate roles of the group companies. The statutory phrase “in the name of or on behalf of” did not require that the trained staff be the holding company's own employees or agents in a strict technical sense. The judge also adequately directed the jury that the script and performance had to cause, or be likely to cause, the average consumer to switch supplier. A further “but for” direction was unnecessary. Read as a whole, the summing-up and written route to verdict fairly left the defence case to the jury.

• Court of Appeal (Criminal Division): Dismissed the company's appeal against conviction: [2012] EWCA Crim 539.
• Guilford Crown Court: Following a jury trial, convicted the company on two counts under regulation 9 of the Consumer Protection from Unfair Trading Regulations 2008 on 10 May 2011. Before trial, the judge rejected its application for dismissal or a stay on the ground that it was not a trader.