Secretary of State for Business, Innovation And Skills v PLT Anti-Marketing Ltd

Under the Consumer Protection from Unfair Trading Regulations 2008, whether non-disclosure is misleading depends on the factual context and all features and circumstances of the commercial practice. Information about free alternative services is not automatically material. The average consumer will generally be expected to obtain information about competing products by shopping around, but that assumption may yield to the particular context.

A trader is not generally required to disclose its mark-up or internal costs. Where a service includes an activity that customers could perform themselves, the free availability of that activity may nevertheless be material when the whole commercial practice is assessed. A context-dependent issue should not be finally determined before the necessary facts are established at trial.

The Secretary of State presented a petition seeking the winding up of PLT in the public interest. PLT had sold a subscription service involving registration with the Telephone Preference Service and Mail Preference Service, both of which were available to the public free of charge. Pending the petition’s final hearing, PLT gave undertakings restricting its marketing.

PLT later sought to vary those undertakings after proposing a revised marketing script. The first-instance judge determined as a preliminary issue that failure to disclose the free availability of the two services would breach Regulation 6 of the Consumer Protection from Unfair Trading Regulations 2008. The Court of Appeal considered whether that issue could properly be finally determined before trial and whether the undertakings should be varied.

Briggs LJ gave the judgment, with Ryder LJ and Richards LJ agreeing.

1. Disposition. The appeal was allowed to the extent that the first-instance determination of the Regulation 6 preliminary issue was set aside. The issue was to be determined only at the final hearing of the petition. The order refusing to vary PLT’s undertakings was left undisturbed.
2. Construction of Regulation 6. The Consumer Protection from Unfair Trading Regulations 2008 must be interpreted, so far as possible, consistently with the Unfair Commercial Practices Directive. Under Regulation 6, material information is information which the average consumer needs, according to the context, to take an informed transactional decision. The analysis must consider all features and circumstances of the commercial practice.
3. Alternative services. Information about alternative products will generally be available in the marketplace. A reasonably well-informed, observant and circumspect consumer may therefore be expected to shop around. That is only a general assumption. It may yield to particular contextual features showing that the consumer needs to obtain the information from the trader.
4. Free registration and trader costs. The judge was wrong to treat the free availability of registration with the Telephone Preference Service and Mail Preference Service as automatically material. PLT was offering to carry out registration applications on behalf of customers, rather than supplying the registers themselves. The cost of carrying out that activity was ordinarily an internal cost of providing the service. Nevertheless, the whole commercial practice might show at trial that the free availability of registration and the related complaints services was material information.
5. Causation and procedure. The question whether the average consumer would have made a different transactional decision had to be assessed in the full factual context. The court could not resolve that question before trial merely by relying on PLT’s reluctance to disclose the information. Because material features of the practice remained disputed or unestablished, the preliminary issue did not admit only a binary answer.
6. Relief. The Court of Appeal would not decide the variation application or a new Regulation 5 case for the first time on appeal. There had been no suitable first-instance determination of the matters relevant to variation, and referring that question back would have been arid while the undertakings remained justified pending trial.

• Court of Appeal (Civil Division): [2015] EWCA Civ 76. Allowed the appeal to the extent of setting aside the binding preliminary determination and directed that the issue be decided at the final hearing; the refusal to vary the undertakings remained in force.
• Manchester District Registry, Chancery Division: His Honour Judge Hodge QC dismissed PLT’s interim application to vary its undertakings and determined that non-disclosure of the free services would breach Regulation 6.