A ‘Consumer Duty’ for the UK Courts – An Actionable Proposal?

Andrew Tyrie has proposed that the UK courts – as well as the CMA itself – be made subject to a new statutory consumer duty. What are the 'rule of law' concerns raised by the proposal and how (to some extent) might they be addressed in practice?

20 May 2019

One of the central recommendations made by CMA Chairman, Andrew Tyrie, for the reform the UK’s competition and consumer law regime is to place,

a new statutory duty on the CMA, and the courts, to treat the interests of consumers, and their protection from detriment, as paramount” (emphasis added).

What would a 'consumer duty' for the courts look like?

In describing the scope of the proposed new judicial duty, Lord Tyrie suggests that it would,

influence the work of the courts charged with applying competition and consumer protection laws, and with reviewing the CMA’s decisions”.  He continues that, “The duty would ensure that the interests of consumers – and what they stand to gain and lose – would be at the forefront of the courts’ consideration, decisions and interpretation of the law. The conduct of the CMA would be subject to appropriate judicial scrutiny with that aim in mind. It would therefore embed a consistent purpose at all stages of the UK competition regime”.

Lord Tyrie’s letter provides four specific examples of likely implications of the new judicial duty:

  • Review of interim remedies: in the expectation that the consumer duty would lead to more interim intervention by the CMA, were such interventions challenged, the duty would imply a need for the court to give particular weight to the protection of the consumer interest on an interim basis.
  • Interim suspension of infringement decisions: the application of the duty would ‘raise the bar’ for those seeking to set aside decisions imposing continuing remedies and would likely require strong reasons why the courts would allow (on an interim basis) the continuance of practices which have been found to be illegal by the CMA.
  • Review of new ‘markets’ remedies: were the court to be called upon to review the imposition of final remedies by the CMA using its proposed new powers to investigate and remedy consumer detriment, the duty would require the court to take account of the consumer interest when reviewing the legality of such remedies.
  • Case management of appeals: the duty (along with other reform proposals) would enable the court to narrow the points of challenge on which it needs to hear oral argument or evidence, and lead it to afford a “margin of appreciation” to the CMA’s findings of fact and analysis following a detailed investigation (provided that it had been properly conducted).

How to square with 'rule of law' concerns?

Without yet knowing how the new judicial duty would be framed, there are some obvious ‘rule of law’ concerns with these examples.  

Take, for instance, the review of ‘markets’ remedies; the suggestion is that the consumer interest should be taken into account when reviewing “legality”. 

The implication of that could be some form of ‘ends justifying the means’ approach in terms of which legality can somehow be traded off against, or balanced with, the consumer interest.  

Equally, looking at the case management of appeals, it is not at all obvious how a court which is seeking to do justice between the parties to an appeal, could properly use the consumer interest as a test for refusing otherwise legitimate grounds of challenge.

The idea that the courts should be subject to such a statutory duty seems to raise quite profound legal and constitutional questions. 

It is one thing to adjust the mandate of a statutory body such as the CMA by re-configuring its existing statutory duties. 

It is quite another to limit or direct the courts in the exercise of their fundamental role as guardians of the rule of law, even if that is to be done in the interests of consumers. 

A 'standing in the shoes' duty as a workable approach?

However, there would appear to be at least one sense in which a consumer duty could potentially be applied to the court without giving rise to these sorts of concerns; this would be via a statutory requirement for the court to ‘stand in the shoes’ of the CMA when determining a question before it. 

This is something for which there is already precedent in the regulated utilities context, specifically when the CMA itself is called upon to determine appeals from decisions of the relevant regulator.

Using the format of those existing utilities statues (and paraphrasing for that purpose s.11E of the Electricity Act 1989), a ‘standing in the shoes’ provision which was designed to be used where a CMA decision was the subject of an appeal to the court might look something like this:

" (1) In determining an appeal the [court] must have regard, to the same extent as is required of the [CMA], to the matters to which the [CMA] must have regard [... in arriving at its decision ...]

(2) In determining the appeal the [court] —

  • may have regard to any matter to which the [CMA] was not able to have regard in relation to the decision which is the subject of the appeal; but
  • must not, in the exercise of that power, have regard to any matter to which the [CMA] would not have been entitled to have regard in reaching its decision had it had the opportunity of doing so."

Bearing in mind that, in this scenario, the CMA’s own decision-making framework would have been altered so as to give greater priority or centrality to the consumer interest, this sort of ‘standing in the shoes’ provision might well be expected to align (or better to align) the perspective of the court with that of the CMA.

For bespoke advice from our expert team on any of the topics discussed in this article, speak to Gordon Downie, Partner in our regulation and markets team, or your usual Shepherd and Wedderburn contact.