Enforcement and settlement

Following changes introduced under the DMCC, the CMA has a much stronger role in enforcing consumer protection laws.

Direct enforcement

The regime for direct enforcement by the CMA has been overhauled.

There remains the risk of criminal liability. However, the CMA also now has the power to impose very substantial fines on businesses of up to 10% of a company’s annual global turnover, and also to order that businesses compensate affected consumers.

Businesses need to actively manage any potential or actual investigation to mitigate these risks. Our team has vast experience in helping companies to navigate investigations to reach the best possible outcome for the business, which may be the investigation being closed with no further action or settlement with negotiated undertakings or reduced fines. In other cases, businesses want to fight, and we have successfully defended clients on the merits of the issues.

Direct enforcement by the CMA is the main means of ensuring compliance with the consumer protection regime, although other enforcement mechanisms remain:

• Court-based regime: Interim and final orders can be obtained by public enforcers (Trading Standards, CMA, FCA, ICO and Ofcom) and Consumers’ Association (Which?).
• Consumer court actions: A range of civil remedies can be obtained by consumers in the civil courts (once the necessary secondary legislation is passed). These remedies are likely to broadly mirror those available under the previous CPR regime, although follow-on damages will not be available despite some advocating for this as the legislation passed through Parliament.