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1712/2019

Whirlpool washing machine recall following intervention by OPSSr

Subject: Product liability/OPSS

Source: GOV.UK Department for Business, Energy & Industrial Strategy and Office for Product Safety and Standards

Followings urgent action by the Office for Product Safety and Standards (OPSS), Whirlpool UK Appliances Ltd has announced a recall campaign to begin in January 2020. Consumers are advised to contact Whirlpool to arrange a replacement.

The advice sets out that there is a risk that the door locks of affected machines could catch fire due to overheating during the washing process. Affected consumers are advised to unplug their machine and register with Whirlpool for a replacement.

Under the recall, consumers with an affected washing machine will be entitled to a free replacement.

 

17/12/2019

FCA fines PPC for misleading consumers and banks

Subject: Claims management services

Source: Financial Conduct Authority

The Financial Conduct Authority (FCA) has fined Professional Personal Claims Limited (PPC) £70,000 for misleading consumers through its websites and printed materials.

PPC’s websites and printed materials prominently used the logos of five major banks which was liable to mislead consumers into believing they were submitting redress claims for mis-sold payment protection insurance (PPI) directly to their banks, rather than engaging PPC as a CMC to pursue claims on their behalf in return for payment of a success fee.

PPC also failed to present accurate, fully formed, detailed and specific complaints to banks. It had submitted Financial Ombudsman Service (FOS) questionnaires to banks on behalf of different consumers. The questionnaires in part contained identical factual allegations where evidence specific to each client should have been presented.

PPC was originally investigated and fined by the previous regulator for CMCs, the Claims Management Regulator (CMR), under the CMR’s prior regulatory framework applicable before 1 April 2019. PPC’s business focused on claims for redress for mis-sold PPI. PPC appealed on 21 December 2018 to the First-tier Tribunal against the CMR’s penalty notice. While the appeal was pending, the FCA took over regulation of CMCs from the CMR. The FCA therefore replaced the CMR as the respondent to PPC’s pending appeal. On 16 September 2019, after reviewing the evidence put forward by the FCA, PPC withdrew its appeal, and the FCA therefore imposed the £70,000 fine on PPC for the failings identified in the CMR’s penalty notice.

This decision follows the transfer of regulatory responsibility for claims management companies (CMCs) to the FCA on 1 April 2019

 

11/09/2019

Prorogation of Parliament appeals in Miller and Cherry heard in the Supreme Court

Subject: Law Lawyers and Lawmakers/Brexit

Source: British and Irish Legal Information Institute (BAILII)

R (on the application of Miller) (Appellant) v The Prime Minister (Respondent)
Cherry and others (Respondents) v Advocate General for Scotland (Appellant) (Scotland).

Because of the importance of the case, a panel of 11 Justices was convened, the maximum number of serving Justices who are permitted to sit. In the unanimous judgment of all 11 Justices. The cases were heard from 17 to 19h September 2019. The court held that:

(i) the first question was whether the lawfulness of the Prime Minister’s advice to Her Majesty [to prorogue Parliament] was justiciable. The court held that it was. The courts have exercised a supervisory jurisdiction over the lawfulness of acts of the Government for centuries. As long ago as 1611, the court held that “the King [who was then the government] hath no prerogative but that which the law of the land allows him”.

(ii) the second question was what are the limits to that power [to advice the Queen to prorogue Parliament]? Two fundamental principles of the British Constitution were relevant to deciding that question. The first was Parliamentary sovereignty - that Parliament can make laws which everyone must obey: this would be undermined if the executive could, through the use of the prerogative, prevent Parliament from exercising its power to make laws for as long as it pleased. The second fundamental principle was Parliamentary
accountability. The power to prorogue is limited by the constitutional principles with which it would otherwise conflict. The relevant limit on the power to prorogue was: that a decision to prorogue (or advise the monarch to prorogue) will be unlawful if the prorogation has the effect of frustrating or preventing, without reasonable justification, the ability of Parliament to carry out its constitutional functions as a legislature and as the body responsible for the supervision of the executive. In judging any justification which might be put forward, the court must of course be sensitive to the responsibilities and experience of the Prime Minister and proceed with appropriate caution. If the prorogation did have that effect, without reasonable justification, there wasno need for the court to consider whether the Prime Minister’s motive or purpose was unlawful.

(iii) The third question was whether the prorogation did have the effect of frustrating or
preventing the ability of Parliament to carry out its constitutional functions without reasonable justification. The prolonged suspension of Parliamentary democracy took place in quite exceptional circumstances: the fundamental change which was due to take place in the Constitution of the United Kingdom on 31st October. Parliament, and in particular the House of Commons as the elected representatives of the people, has a right to a voice in how that change comes about. The effect upon the fundamentals of our democracy was extreme. No justification for taking action with such an extreme effect had been put before the court.

The only evidence of why it was taken is the memorandum from Nikki da Costa of 15 August. It explained why holding the Queen’s Speech to open a new session of Parliament on 14 October would be desirable. It did not explain why it was necessary to bring Parliamentary business to a halt for five weeks before that, when the normal period necessary to prepare for the Queen’s Speech is four to six days. It did not discuss the difference between prorogation and recess. It did does not discuss the impact of prorogation on the special procedures for scrutinising the delegated legislation necessary to achieve an orderly withdrawal from the European Union, with or without
a withdrawal agreement, on 31st October. It did not discuss what Parliamentary time would be needed to secure Parliamentary approval for any new withdrawal agreement, as required by section 13 of the European Union (Withdrawal) Act 2018.

The Court was bound to conclude, therefore, that the decision to advise Her Majesty to prorogue Parliament was unlawful because it had the effect of frustrating or preventing the ability of Parliament to carry out its constitutional functions without reasonable justification.

(iv) The final question, therefore, was what the legal effect of that finding was and therefore what remedies the Court should grant. The court had already concluded that the Prime Minister’s advice to Her Majesty was unlawful, void and of no effect. This meant that the Order in Council to which it led was also unlawful, void and of no effect and should be quashed. This meant that when the Royal Commissioners walked into the House of Lords it was as if they walked in with a blank sheet of paper. The prorogation was also void and of no effect. Parliament has not been prorogued.

[Original text of the case report supplied by BAILII gratefully acknowledged. Crown copyright: contains public sector information licensed under the Open Government Licence v3.0
Legaleze is solely responsible for the above text which is a summary only and the full report should be read.]

Legaleze comment

The Withdrawal Act specifically provided that “Exit Day” (i.e. the date of Brexit) meant 29 March 2019 at 11.00 pm. The Act seems to have envisaged that the Withdrawal Agreement would be negotiated in time to come into effect on Exit Day but it did not state that specifically.

While the Supreme Court judgment in R (on the application of Miller) (Appellant) v The Prime Minister (Respondent); Cherry and others (Respondents) v Advocate General for Scotland (Appellant) (Scotland) was momentous and unprecedented in British modern constitutional history, it has no effect, at least directly, on the legal date for Brexit. The Supremem Court emphasised that the two cases were not about when and on what terms the United Kingdom is to leave the European Union

In our opinion, much of the political and legal turmoil and delay over Brexit stems from the failure of the Government and indeed Parliament to envisage and think through the consequences and plan for the possibility that a satisfactory withdrawal agreement might not be negotiated within the two year timetable provided by Article 50 of the EU Treaty. This failure began with the framing of the Referendum question in 2016 which offered voters the binary choice:

* “Remain a member of the European Union”;

* “Leave the European Union”.

The framers of the Referendum failed to include any question around the possibility that a withdrawal agreement acceptable to Parliament might not be concluded within the two year deadline.

For commentary on this topic, see e.g. “The tale of the Brexit referendum question” David Allen Green 3 August 2017 ft.com. See also: Referendums.

 

11/02/2019

Customs controls—no deal Brexit guidance

Subject: Brexit; Selling and marketing/International selling

Source: https://www.gov.uk/government/publications/partnership-pack-preparing-for-a-no-deal-eu-exit

The government has published new and updated guidance pages on customs controls if the UK leaves the EU without a deal in place. The guidance is not exhaustive and the position may change, so users are advised to bookmark and monitor the relevant guidance pages.

HM Revenue and Customs has published the following guidance to help stakeholders prepare for day one of a no deal Brexit:

• Customs agents—what to expect on day one of a 'no deal' scenario

• Temporary storage operators—what to expect on day one of a 'no deal' scenario

• Customs warehouses—what to expect on day one of a 'no deal' scenario

• Organisations, businesses and individuals in the creative, cultural, and sport sectors—what to expect on day one of a 'no deal' scenario

The guidance covers various changes to customs controls and processes in the event of a no deal Brexit and lists some of the actions that organisations can stakeholders can take to prepare, linking out to relevant guidance on trading and travel in the EU.

Additional guidance includes:

• Trading with the EU if there’s no Brexit deal

• Travelling to the EU with a UK passport if there’s no Brexit deal

• Letters on 'no deal' Brexit advice for businesses only trading with the EU

Further guidance on preparing for day one of a no deal Brexit is available: Partnership pack: preparing for changes at the UK border after a no deal EU exit.

 

11/02/2019

Second report on the European Union (Withdrawal) Act published

Subject: Brexit

Source: https://www.gov.uk/government/publications/the-second-european-union-withdrawal-act-and-common-frameworks-report?utm_source=47cc8f4a-e943-4cf4-9a10-8dc84eb2b0a4&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

The Cabinet Office has published a second report on the European Union (Withdrawal) Act 2018 (EU(W)A 2018). The report covers progress by the government and devolved administrations in the development of common legislative frameworks in areas of devolved competence which are currently subject to the supremacy of EU law. The report covers the period between 26 September and 25 December 2018. The common frameworks are intended to ensure harmonization within the UK market in key devolved areas. The reports are required under EU(W)A 2018, Sch 3.

The report relates to the government use of powers in EU(W)A 2018, s 12 and Sch 3 to maintain EU law limits on UK devolved competences (in spite of Brexit) in order to maintain harmonization of UK law and functioning of the UK internal market post-Brexit. EU(W)A 2018, s 12 removes the requirements in each of the devolution statutes that the devolved legislatures can only legislate in ways that are compatible with EU law. EU(W)A 2018 then replaces those requirements with powers for the UK government to introduce legislation temporarily freezing the devolved competences in those areas in order to establish UK-wide legislative frameworks. These powers were controversial during the passage of the EU(W)A 2018 and the government has not yet sought to make extensive use of them.

The report does not provide detail, but highlights progress in the 24 priority areas and standalone sessions on:

• animal health and welfare

• chemicals and pesticides 

• plant health, seeds and propagating material 

• food and feed hygiene and safety law  

• nutrition health claims, composition and labelling 

• public procurement

• fertiliser regulations

Further reports are expected.

11/02/2019

Global Awareness and Halak Online fined and banned by PSA

Subject: Telecommunications/Paid for services

Source: https://psauthority.org.uk/news/news/2019/february/psa-bans-two-companies-from-phone-paid-services-market-and-issues-further-fines

The Phone-paid Services Authority (PSA) has issued fines and five-year bans to Global Awareness Ltd and Halak Online Ltd for failing to comply with regulatory sanctions. Global Awareness Ltd was given a five-year ban from the phone-paid services market and fined £200,000. Halak Online Ltd was also banned from the phone-paid services market for five years and was issued a £250,000 fine.

Global Awareness Ltd operated a video subscription service which charged users £2.50–£4.50 a week to receive links to adult video platforms. The company was initially issued with a £650,000 fine in November 2017 after it was found to have managed several similar video subscription platforms which had charged customers without obtaining their consent. The failure of the company to comply with this sanction resulted in this additional fine and the five-year ban.

Similarly, Halak Online Ltd was issued with an additional fine and a five-year ban for failing to comply with a £200,000 fine and a bar from the phone-paid services market in June 2018, when it was found that the call connection service which charged consumers premium rates for connection to customer helplines such as Sky and Microsoft, failed to make clear to customers that using the service could result in the call costing more than the direct line for these companies. The company also failed to inform customers that theirs was a third-party service.

11/02/2019

Man convicted of offering DNP for sale as a weight-loss drug

Subject: Food selling and manufacturing

Source: https://www.food.gov.uk/news-alerts/news/fsa-welcomes-successful-council-prosecution

A man has been sentenced for selling the industrial chemical 2,4 Dinitrophenol (DNP) following a successful prosecution by Allerdale Borough Council. It is illegal to sell DNP for human consumption. Shaun Corrigan received a nine-month custodial sentence, suspended for 12 months, 180 hours unpaid work and was disqualified as a company director of Enhanced Athlete Europe Limited for two years for selling the drug. Corrigan pleaded guilty to the charge of offering DNP for sale as a ‘fat burner’ and weight-loss drug at Carlisle Magistrates Court on 29 September 2018. A jury at Carlisle Magistrates Court on 6 February 2019 found Corrigan’s company guilty of placing an unsafe food product on to the market, fining the company £100,000, plus costs.

 

11/02/2019

Lycra manufacturer fails in enforcing post termination restrictions on scientists

Subject: Employment/Post-termination restrictions against competition

Source: British and Irish Legal Information Institute (BAILII)

Invista Textiles (UK) Ltd and another v Adriana Botes and others

Hearing dates: 3rd, 4th, 8th - 11th and 19th October 2018

[2019] EWHC 58 (Ch)

 

Scientists’ employment contracts imposed a restriction on the use by the employees for three months post-termination of “any confidential information or trade secrets concerning the business of the Employer or in respect of which the employer may be bound by an obligation to any third party” following termination.  While the judge found that the employer owned genuine trade secrets, he ruled that the clause was far wider than reasonably necessary to protect those trade secrets. He ruled that the clause was an unreasonable restraint of trade and unenforceable after termination of employment. A clause limited to “trade secrets” expressly or using similar wording like that could be reasonable.

The contracts also included a three month post-termination restriction on competing with the employer. The judge commented that in the type of case in which the information the clause was meant to protect had a currency in the short term, such as sales leads, a clause for a short period might very well make sense. But having regard to the definition of “competing” in the contract, the judge ruled that  when applied to employees like the individual defendants in the case, the restriction prevented them from exercising the very same skills they were hired for in the first place for three months post-employment. The clause in its operation after the employment had ceased was an unreasonable restraint of trade. The short period in the clause was merely a relatively short period to try and make an unreasonable clause seem more reasonable.

 

[Original text of the case report supplied by BAILII gratefully acknowledged. Crown copyright: contains public sector information licensed under the Open Government Licence v3.0
Legaleze is solely responsible for the above text which is a summary only and the full report should be read.]

Comment: when drafting impose post-termination restrictions, it is essential to consider carefully the particular circumstances of the employer and the knowledge and skills of the employees, and seek to protect only genuine trade secrets; stock clauses should not be relied upon.

 

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