X Ltd, R. v

A commercial practice under the Consumer Protection from Unfair Trading Regulations 2008 may arise from a single act directed at one consumer. It may occur before, during or after a transaction. A transactional decision includes a decision to make payment or exercise a contractual right after supply.

Where there is prima facie evidence that sales information was materially inaccurate, or that a company’s conduct towards a consumer may reveal reckless disregard of professional diligence, the issue should be left to the jury. Evidence concerning one consumer may suffice where its depth permits an inference about the company’s operating methods. The prosecution need not identify the particular director whose state of mind is attributed to the company.

X Ltd, which sold domestic security systems by cold calling, was indicted on four counts under the Consumer Protection from Unfair Trading Regulations 2008. The allegations concerned inaccurate burglary statistics, a CCTV system said to be ineffective as installed, and commercial practices alleged to breach professional diligence in dealings with an elderly and vulnerable consumer.

At the Crown Court, the judge upheld submissions of no case to answer on every count. The Crown appealed. The central questions were whether the evidence was capable of establishing materially inaccurate claims, a misleading commercial practice extending through supply and payment, and corporate knowledge or recklessness concerning professional diligence.

The Crown’s appeal was allowed on all four counts. The rulings of no case to answer were set aside and the indictment was remitted for a fresh trial before a different judge.

1. Count 1. There was prima facie evidence that the company had materially misstated burglary data. A three-month increase for a ward had been presented as a 12-month increase in the customer’s postcode area, although the annual ward figures showed a decrease. The judge wrongly treated likely consumer influence as decisive. Whether the inaccuracies were material was a matter capable of being left to the jury.
2. Count 3. Regulation 2 gives “commercial practice” a wide meaning. Its reference to “any act” permits a practice to derive from a single incident involving a single consumer, depending on the circumstances. The concept also reaches conduct connected with supply after a transaction. A transactional decision includes a decision whether to make payment or exercise a contractual right. Accordingly, the alleged representation that the system as fitted was effective could continue through installation and the subsequent payment call.
3. Counts 2 and 4. The prosecution was required to prove knowledge or recklessness, rather than relying on strict liability. Evidence of failures at each stage of one consumer’s dealings with the company could permit an inference that the company, through at least one controlling mind, operated with reckless disregard for professional diligence. It was unnecessary to identify the particular director. Following the approach in R v Jabber [2006] EWCA Crim 2964, the evidence was capable of permitting the jury to reject innocent explanations and draw the required inference.
4. Order. The appeal was allowed in respect of each count and the case was remitted to the Crown Court for trial afresh before a different judge. The court directed that section 71 of the Criminal Justice Act 2003 should not apply and permitted publication of the anonymised judgment.

• Court of Appeal (Criminal Division). The Crown’s appeal was allowed: [2013] EWCA Crim 818. The no-case rulings on all four counts were set aside and the case was remitted for a fresh trial before a different judge.
• Crown Court. On 1 November 2012, the judge accepted the company’s submissions of no case to answer on each count of the indictment.