Trading Standards legislation aims to achieve protection for consumers whilst creating a fair trading environment for legitimate business. Where a breach of the law is identified a thorough investigation will be carried out. However, a range of enforcement action options are available including advice and cautions, with prosecution only being undertaken as a last resort. 

Nearly all legislation contains 'strict liability' offences where a criminal offence may be omitted even though it was not intended. To balance this, the law recognises genuine efforts made to comply with the legislation by including a defence to avoid conviction. This is commonly known as a 'due diligence' defence, and requires that the business or person:

Has taken all reasonable precautions or steps and has exercised all due diligence to avoid the commission of the offence.

This means that the person must have a system to ensure compliance with the law (reasonable precautions or steps) and a method to ensure that the system is followed correctly (due diligence).

Both parts of the defence must be proved to be successful.

General Guidance

None of the laws which provide 'due diligence' defences describe in detail what systems will satisfy the defence. Ultimately a court of law will decide on the facts in each case. Examples of previous court cases are listed in Appendix 1 to show the level of care expected in particular circumstances. The Trading Standards Service offers the following general points as guidance.

Where it is reasonable to take a particular precaution then it must be carried out to achieve a successful defence. 

Positive action is necessary – doing nothing will not provide a defence.

It is necessary for a business to be aware of the law and the requirements which are relevant to them.

All the activities of the business which may cause a breach of the law should be identified, controlled and checked by a system of working, for example:

a. Selection of appropriate raw materials and components

b. Staff experience and training

c. Suitability of premises and equipment

d. Specifications (including orders) having regard to legal requirements.

e. Production or service delivery methods

f. Labelling, instructions, brochures and advertising. 

The procedures employed must ensure that the system is being followed correctly. 

The system should include provision for proposing and carrying out effective remedial action when things are found to be wrong.

The system must be appropriate to the size of the business and its position in the supply chain ie importers, manufacturers and other large companies will be expected to implement more thorough systems than small retailers.

The system must be appropriate to the possible consequences of non-compliance ie more thorough systems will be needed where serious or widespread consequences are possible.

Documented records should be kept of procedures followed and checks carried out to demonstrate that the system is operating correctly.

The operation of the system must be reviewed regularly and amended if necessary to ensure it is still appropriate and effective.

Simple and common-sense ways of examining and/or testing of goods and services to determine compliance should be used whenever possible.

Where batch sampling and/or testing is involved an appropriate number of items examined or tested should be decided with reference to the:

• Seriousness of the consequences of non-compliance or failure
• Volume of product supplied
• Complexity of product
• Cost of each item
• Size of batch
• Frequency of testing
• Size of business
• Previous test results
• Cost of testing.  

Steps should be taken to ensure awareness of complaints and any other information about problems with goods or services and this should feed into a remedial action process. 

Liability of others

It may also be possible to pass the liability for an offence to another named person. To do this, you must show that you have carried out "due diligence" as above and that the offence was either:

Due to the action or inaction of that other person or due to reliance on information provided by another person

In order to be able to pass liability it must be reasonable to believe and rely on any information received and where possible simple checks should be carried out to verify the information or action taken.

Passing the liability to another will not automatically remove your own liability but will allow action to be taken against those others, whether or not it is taken against you. The final decision as to which person is subject to formal action will depend upon the particular facts in each case.

Quality management systems

Many of the principles and procedures involved in establishing a defence of "reasonable precautions and due diligence" are similar to those in a Quality management system (QMS). This service would encourage businesses to adopt a documented QMS, whether it is ultimately seeks third party certification of the system.

Care should be taken to ensure that any QMS included reference to and implements controls to ensure compliance with legislative requirements. The establishment of a QMS (even if certified to BS EN ISO 9000) which does not refer to legal requirements will not provide a defence.

This information has been prepared for the guidance of traders. It is necessarily worded in a general way and cannot cover every circumstance. It is not an authoritative interpretation of the law.

For further advice contact the team - link below to relevant page.

Related document: 

Due_Diligence_Defence_Case_Law.pdf