Extending Competitive Markets
Empowered Consumers, Successful Business
dti Consultation July 2004 http://www.dti.gov.uk/ccp/consultpdf/consumerstrat.pdf
Deadline for comments: 31 October 2004
Margaret.Sutherland@dti.gsi.gov.uk
Comments by:
Dr David Jenkins
Royal Society for the Prevention of Accidents
Introduction
The consultation document deals with many matters beyond the direct concern of RoSPA1 but some that have considerable relevance (RoSPA is not listed in Annex D). The following comments are therefore mainly confined to those areas that affect the safety of consumers, in particular the properties and performance of the products they use.
A plethora of consultation documents has appeared recently on all aspects of trade and consumer affairs whilst at the same time major changes have already been introduced at the DTI. It is questionable as to what value consultations have if important changes within its scope have already been decided and acted upon. Some important issues include the demise of the DTI’s specialist Consumer Safety Unit and the loss of HASS, the Home Accident Surveillance System database.
There have been many initiatives, reorganisations and transformations in local government and their role in trade monitoring over the past twenty years. A period of calm consolidation, concentrating on the fundamentals of ensuring fair trading might be preferable to yet further upheaval.
The changes already introduced and planned affect us all, they are costly and sometimes wasteful and ineffective but the most worrying, and largely unrecognised consequence, must be the affects they have on the personnel involved. Some are professionally qualified in this area of work and are dedicated to the promotion of fair trading and public protection. Any changes that are made following the latest round of discussions must be beneficial to all parties but primarily be in the interests of fair trading.
The author will provide an explanation for any opinion expressed and supply further information to substantiate the points made.
Questions - Tackling problem markets
1. Do you agree with our analysis on intervention?
No. This analysis of the issues presented is incomplete and selective. There is no acknowledgement for example of the vital work formerly carried out by the DTI’s Consumer Safety Unit and how this is to be dealt with in future. This represents a potentially dangerous vacuum that puts the public at unacceptable risk.
Co-ordinating effective and speedy nation-wide action on unsafe products and dealing with the rapid exchange of information throughout the EU (RAPEX) need to be addressed. Who are the authorities manufacturers and distributors have to notify about dangerous products? Nor is a measure of effectiveness provided to assess the performance of safety measures such as a reduction in accidents, previously provided by HASS or the number of formal cautions, prosecutions and recalls.
Detailed research into packaging and other areas was directed by the HASS data. The increased use of ring pulls and improvements in corned beef cans have reduced the number of injuries recorded in HASS. Over 1500 children under 5 fell from domestic buildings and structures suggesting further work needed in this area in 20022. RoSPA encouraged a manufacturer of window guards to tackle this problem. Hundreds of children scalded after pulling on kettle flexes led to the development of “cordless” kettles. How will safety issues be identified in future without such information?
The statement “excluding dishonest traders” (1.14) presumes the law will be observed. This naïve statement, often found in such documents, ignores the essential contribution of enforcement. This not only deals with the criminally inclined but persuades others that despite severe competition, the law must be observed, particularly when it comes to dealing in unsafe products. An understanding of enforcement practice would benefit administrators at the highest level.
Business can only succeed and consumers fully enjoy effective involvement in the generation and distribution of goods and services if basic rules of fair trade are properly observed. Commercial advantage can easily be achieved by not complying with the law and this must be countered by a reasonable level of monitoring of the market to ensure fairness to all participants. Lack of fairness leads to an abuse by more powerful interests over others with less influence and this is where the law must intervene. Smaller and medium sized companies are in a similar position to that of consumers in being at serious financial risk. When products and services supplied present a physical danger, the risk can lead to fatal consequences.
Over thirty Acts of Parliament are enforced by the Trading Standards Service to achieve this fair trade imperative. This document fails to acknowledge the importance of complying with the law, thus presenting a fundamental flaw in government plans. Once more the emphasis is on de-regulation and a soft touch for business rather than a “firm but fair” approach. Furthermore the future of the service, formerly the Weights and Measures Inspectorate, must now be in jeopardy.
Local authorities provide the front line trade control service and have carried out public consultation as to which functions should take precedence3. The law that regulates the safety of consumer products repeatedly figures at the top of the list. Government’s recent action flies in the face of this public declaration by watering down and eventually closing their specialist Consumer Safety Unit set up twenty years previously and by discontinuing the highly regarded accident database the Home Accident Surveillance System (HASS).
All this was done without explanation, consultation and in the face of widespread criticism that doesn’t auger well for taking into account comments made in consultations of this kind. In light of its recent history, government needs to win back the confidence and credibility it has lost particularly with regard to consumers’ interests and their entitlement to be provided with safe products.
Monitoring of products on the market appears to have fallen, particularly when formal proceedings such as prosecutions brought by local councils’ Trading Standards Services are examined. Prosecution rates have fallen to 100 per annum in the past 5 years compared with 600 a year some fifteen years ago45. RoSPA is not convinced that the reason for this reduction is safer products or that alternative methods have been adopted by those charged with a duty to enforce the law to deal with unsafe products. This is reflected in a doubling of the number of product recalls since RoSPA first began to log them in 1988.
It is likely that serious incidents relating to imported consumer products resulting in serious injury and death as well as substantial property damage will be experienced well before the expiry of the government’s 5-10 year strategy period unless adequate steps are taken to ensure the effective enforcement of product safety legislation. There appears to be no nation wide official monitoring of consumer products on the market and little co-ordinated testing by the authorities. The claim that interventions will be “evidence-based, focused and evaluated” cannot therefore be substantiated.
Consumers are therefore reliant almost entirely on manufacturers, importers and distributors to ensure their goods are safe and in accordance with the requirements of the law. This is not adequate and a statistically based national sampling scheme needs to be introduced at the earliest opportunity utilising the services of UKAS registered laboratories but supervised by suitably qualified officials such as TSOs.
It is claimed that Britain is thriving (2.1) and enjoys the most open markets (2.2) and yet the comparative study puts us only on a par with other OECD countries6(1.16). Our open markets are not subject to any effective monitoring of imported goods with 300,000 unsafe products found at Felixstowe alone in one year7. This must be unacceptable and will undoubtedly lead to serious problems in the future, not least of which is the elimination of what is left of British manufacturing.
Another important are not covered by the analysis on intervention is that of product standards. Standards interpret the legal requirements and therefore set the level of safety that consumers can expect. Although consumers are represented both in UK through the BSI and at the European level the overwhelming influence in setting levels of safe performance remains with manufacturers’ interests. This has resulted in a continuing problem of excessively hot surfaces generated by consumer appliances and resulting in burns making their use in the workplace illegal but acceptable in the home. Also, a technical committee ignoring the reasonable suggestions of a Coroner following a fatality involving a dangerous product design to modify their standard. The input of independent experts into standards writing is sadly lacking to the detriment of consumers and the more diligent manufacturers.
Questions – Empowering consumers
2. OFT Consumer Codes Approval Scheme
Do you agree that consumers would benefit from the development of a single brand in this area? How can we encourage local authorities and other providers to bring their schemes under this single umbrella? What would the costs and benefits of this approach be?
A single approval scheme brand would seem sensible and help avoid confusion. Approved Codes should however be enforceable in that a claim of conformity that is materially false should constitute a false trade description under the Trade Descriptions Act 1968. Monitoring of the Scheme is important as failure to comply will undermine confidence to the extent of negating any positive value.
Codes should be drawn up by BSI Consumer Policy Committee in conjunction with the OFT to ensure the widest cross-section of input.
Consumer Direct is intended to empower consumers by providing the first point of contact for high quality advice and redress. This needs to be monitored effectively but who will carry this out and will it be open? Consumer education needs to be improved from the classroom up.
3. Trader Information
Do you agree that making trader information available as outlined? What publicly available information about traders should be included? What are the costs, benefits and practical considerations of this?
Yes. Information should be made available on the new Consumer Direct online including at least the details of recalls, prosecutions and formal cautions.
Questions – Consumer representation and the regulated industries
4. What are the costs and benefits of moving consumer representation to a single ‘National Utilities Consumer Council’?
Such a body would need to have specialist sub groups dealing with each of the utilities. This may result in the setting up of a supreme body that would be overbearing, bureaucratic and ineffective. Greater coordination between the utility groups and with other bodies such as the OFT would be beneficial.
5. What would be an appropriate timescale?
No comment.
6. We welcome your views on the extension of ombudsmen schemes to other utility sectors, such as gas, electricity, postal services and water, and in particular on the costs and benefits involved.
We support the extension of ombudsmen schemes to the other utility sectors with suitable arrangements being made to ensure effectiveness and efficient use of resources. Performance should be tested using sampling techniques and an annual report produced and posted on the Consumer Direct website.
Questions – A clearer legal framework
7. What are your views on the options for a clearer legislative framework?
An obvious improvement but not easily achievable. A new general duty is to be introduced not to trade unfairly. Presumably this is easier to specify legally than a duty to trade fairly? Unfair trading would need to be defined which would need careful consideration to prevent confusion and cause problems for the enforcement authorities.
There is no reference to the serious need for product safety law to be updated. The law does not deal effectively with unsafe products but rather with those who placed them on the market or who supplied them. The use of the s.39 due diligence defence, or some other means preventing the court finding a case proved “beyond reasonable doubt”, confuses the situation giving the impression that the product in question is not unsafe when the evidence clearly shows otherwise. Establishing the fact that a product is unsafe and who is guilty of the offence of placing it on the market or supplying it should be kept entirely separate in our view. The former should be capable of being established on the balance of probabilities whilst the later follow the more onerous requirements of criminal law.
We agree that the law is in need of clarification and trade dispute resolution in need of improvement. Also, the Small Claims procedures would benefit from being simplified thus encouraging consumers to pursue their own cases.
Consideration might be given with regard to product safety legislation to requiring products to be marked with the relevant standard number BS EN. Failure to meet the specification would then lead to conviction under the Trade Descriptions Act 1968 and avoid specific legislation. Failure to meet the appropriate standard should also mean the requirements of the General Product Safety Regulations 1994 have been breached. This is often open to question and a clear relationship needs to be established.
8. What is your preferred option and what do you envisage to be the costs, benefits and practical considerations?
Rationalising and simplifying the law as suggested above is the preferred option.
Questions – Resolving problems
9. What are your views on the options for improving accessibility and quality of third party dispute resolution, and in particular on the costs and benefits of our preferred option?
No comment.
10. We invite your views on our proposals for representative actions and public redress, and in particular on the costs and benefits of our preferred options, including your views on the exact powers that might be needed and the types and numbers of cases each year where these powers might be used.
No comment.
Questions – Ensuring a fair and safe trading environment
11. We welcome your views on our proposal for stronger central coordination
Although their objectives should be the same, there is a palpable gap between Whitehall civil servants trying to implement government’s agenda and the practitioners, often professionals in their own fields, at the “coalface”. This needs to be addressed and dealt with before any meaningful progress towards achieving the goals set by the proposal can be made. Government has confronted the firemen, police, teachers, medics and others who have operated largely independently in the public services but doesn’t appear to have made out a convincing case for greater control.
Those that provide services directly to the public appear under valued by government and Whitehall and further centralisation to improve services will be difficult. Considerable advances with regard to respect, trust and confidence will need to be achieved.
Trading Standards Service
Minimum standards and performance criteria to be set
Direction and priorities better co-ordinated
Cross border partnerships to be encouraged
Specialist teams at regional level to be developed
Improved management and leadership to be supported
Strengthening competition
Enhancing existing high levels of consumer safety.
There has been no attempt in the document to portray the views of consumers whose opinions regarding priorities for the Trading Standards Services have been documented elsewhere.
12. How can central and local government align priorities once a year?
More long term fundamental priorities need to be set and agreed such as the monitoring of products on the market to ensure compliance with the law particularly with regard to the safety of those products. It is recognised that politicians at local and national level need to be seen to be effective and that this has in the past contributed to the distortions that have now been widely recognised in the quality of the service nationally.
13. Do you agree with our proposals for performance improvement of trading standards?
It is widely accepted both in the profession and by the expert studies that have been carried out that the service provided throughout the country is extremely varied. This postcode approach to consumer protection is clearly unacceptable and changes need to be made to the trading standards services to ensure greater conformity with an acceptable standard of performance.
14. Do you agree with our proposals to promote partnership working? How could these best work in practice?
The range of legislation that local trading standards services have to enforce encompassing all activities involving quality, quantity, price, description and safety of goods and services is beyond the comprehension of most consumers. Specialisation is the only sensible approach and this was how the former Metropolitan County Councils succeeded so well before their forced demise in 1986. Partnership involves relinquishing some degree of power by the local authorities and this will be difficult to achieve. Incentives will need to be introduced to make such joint collaboration arrangements more attractive.
15. Do you agree with our approach to people, skills and leadership?
Those working in the trading standards service represent the most important resource and their training must attract close scrutiny. Changes have already been introduced that will equip officers for their role in ensuring the trading laws are complied with. It is of concern that the service when presenting itself to prospective candidates published in TS Today omits the most important area of the work viz. product safety.
Conclusions
Independent and professional monitoring of the market is essential to ensure consumer protection and fairness in trade. There is little evidence of this being achieved at present and sub-standard unsafe products are being allowed onto the market. The consequences are largely hidden because only the most dramatic incident such as a house fire in which people are killed will feature in the media.
Which? provides useful assessments on a wide range of consumer products but appears to have had little support or encouragement from governments, perhaps because of its jealously guarded independent stance. Consumers need such a body if confidence is to be enhanced and we regret the closure of the Which? testing laboratories in Milton Keynes.
Consumer products must achieve the safety levels required by law8 and the level of risk they present, determined at the design stage, must be as low as reasonably practical (ALARP).
Consumers must be provided with all necessary information so that they can assess the risk presented by the products they consider purchasing and using.
It will be difficult to assess the effectiveness of any proposed interventions without being able to quantify the number of patients treated as a result of product failure related injuries.
Effective and fair surveillance of the marketplace provides the confidence needed for both business and consumers. Failure to ensure this is likely to lead to a downward spiral in which businesses will be pressured by those less scrupulous to supply products that fail to meet minimum standards thus putting society at risk of personal injury and property damage.
OFT Codes are largely voluntary and this is seen as a weakness. Self regulation has had only limited success and if rules are worthwhile they should have the backing of legal sanctions.
Complaints
The complaints records reported in this document must give serious cause for concern. This alone is justification for a complete review of current practice. Some official reliable monitoring of complaints must be introduced to measure the effectiveness of any changes made to address this major problem. The British Standard 8600 should be followed.
Litigation
From our experience of product liability cases, we are very doubtful whether the claim that we are a litigious society can be substantiated. Our own experience is that there is little action in this area and those cases we have been involved in have often resulted in settlements being made out of court and conditions of confidentiality being imposed. The minister has stated that there is no official record of such cases and the product liability lawyers group APIL do not appear to have complete listings either.
David Jenkins
Product Safety Adviser
RoSPA
Email: help@rospa.com
1. RoSPA’s purpose is to save lives and reduce injuries.
2. 24th Final Report of the Home Accident Surveillance System, DTI.
3. Birmingham City Council (2000), Core Cities Special Projects Group Benchmarking Results, 1999-2000 (unpublished).
4. “Court Cases Cut”, David Jenkins, Staying Alive, RoSPA, Summer 2004.
5. “Decline in safety-related prosecutions”, David Jenkins, TS Today, June 2004.
6. Comparative Report on Consumer Policy Regimes, DTI, October 2003.
7. The Importation of Non-compliant Consumer Goods 2002, Metra Martech
8. Consumer Protection Act 1987
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