UNSOLICITED SERVICES (TRADE AND BUSINESS DIRECTORIES) BILL
EXPLANATORY AND FINANCIAL MEMORANDUM
INTRODUCTION
1. This Explanatory and Financial Memorandum has been prepared by the Department of Enterprise, Trade and Investment (“the Department”) in order to assist the reader of the Bill and to help inform debate on it. It does not form part of the Bill and has not been endorsed by the Assembly.
2. The Memorandum needs to be read in conjunction with the Bill. It is not, and is not meant to be, a comprehensive description of the Bill. So where a clause or part of a clause or schedule does not seem to require an explanation or comment, none is given.BACKGROUND AND POLICY OBJECTIVES
3. The Bill is intended to re-enact with amendments certain provisions of the Unsolicited Goods and Services ( Northern Ireland) Order 1976 (S.I. 1976/57 (N.I. 1) (“the 1976 Order”). These provisions govern the processes of authorization by advertisers of entries in directories, for which demands for payment can legitimately be issued.
4. The 1976 Order was passed, amongst other reasons, to control the circumstances in which businesses could be charged for the publication of entries about them in directories. It had been the case prior to the 1976 Order, that unwary businesses could be tricked by various sharp practices into paying for directory entries for which they had not asked and which they did not want.
5. The Bill is intended to remove provisions which the Department believes are burdensome and unnecessary, to remove anomalies and to ensure the compatibility of Northern Ireland law with obligations arising from membership of the European Union. In particular the Bill will ensure that the law on unsolicited services in Northern Ireland will comply with Article 9(1) of Directive 2000/31/EC of the European Parliament and of the Council on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (the E-Commerce Directive). Throughout the UK, Article 9(1) is being implemented on an ad hoc basis, where legislation is identified which contravenes its requirements.
6. The Bill is also intended to facilitate electronic commerce by introducing equivalence between paper-based methods and electronic methods for contracting an entry in a directory.
7. The equivalent in Great Britain of the 1976 Order is the Unsolicited Goods and Services Act 1971 (the “1971 Act”). The 1971 Act was amended by the Unsolicited Goods and Services (Amendment) Act 1975 (1975 c.13).
8. The proposed Bill will have similar effect to the amendments made to the 1971 Act by the Regulatory Reform (Unsolicited Goods and Services Act 1971) (Directory Entries and Demands for Payment) Order 2005 (S.I. 2005/55); and the Unsolicited Goods and Services Act 1971 (Electronic Commerce) (Amendment) Regulations 2005 (S.I. 2005/148). The Regulatory Reform Act 2001 does not apply to Northern Ireland legislation, so to achieve the same effects a Bill is necessary.
CONSULTATION
9. The consultation on the proposed Bill took place over the normal 12 week period and ended on 28 August 2009.
10. The consultation exercise was carried out using the Office of First Minister and Deputy First Minister Guidance on issue of consultation documents and issued to those on the list in that document. As it deals with trade directories it was also issued to the Data Publishers Association, the Periodical Publishers Association, Yell Limited and the European Association of Directory Publishers.
11. It was agreed with the Enterprise, Trade and Investment Committee of the Assembly that the Department would contact certain organisations offering additional briefing if requested. Accordingly contact was made with the NI Chamber of Commerce and the NI Branches of the Institute of Directors, the Federation of Small Businesses and the Confederation of British Industries. None of these organisations requested a briefing.
12. It was not expected that many organisations would respond, as the Bill will re-enact with technical and relatively minor amendments certain provisions of the 1976 Order. Ten organisations responded. Seven had no comments.
13. The Federation of Small Businesses Northern Ireland Policy Unit welcomed the simplification of the law, the elimination of burdensome and unnecessary procedures and the bringing of NI law into line with that in GB.
14. Antrim Borough Council and Ballymena Borough Council welcomed the Bill.OPTIONS CONSIDERED
15. To ensure compliance with Article 9 of the E-Commerce Directive, an amendment to the law is required to create an electronic equivalent of Business Order Forms. The risk of not proceeding would be an infraction of European Community law, and could be subject to infraction proceedings.
16. This could have been achieved by the Department making Regulations under section 2(2) of the European Communities Act 1972 to amend the 1976 Order. However it would not have been possible to amend the 1976 Order in the same way as the 1971 Act was amended by the Regulatory Reform (Unsolicited Goods and Services Act 1971) (Directory Entries and Demands for Payment) Order 2005. These provisions relaxed the existing requirements where clients renew or extend existing contracts for entries in a directory and simplified requirements as to the form and content of certain documents relating to contracts for directory entries. The Department wishes to ensure that NI businesses have the same benefits and protections in this area of law as in the rest of the United Kingdom. Accordingly it was decided to proceed by introducing a Bill into the Assembly.
OVERVIEW
17. The Bill will make a number of technical and relatively minor changes to the current law.
18. The Great Britain Statutory Instruments were constrained by the limited powers to make them contained in the Regulatory Reform Act 2001 and the European Communities Act 1972.
19. As the Bill is not similarly constrained it will restate the law in this area, with amendments similar to those made by the recent Great Britain Statutory Instruments, in a consolidated and more readily understood form. The proposed Bill largely follows the language of the Great Britain Statutory Instruments but is different in structure.
20. The Northern Ireland Bill, although different in structure, will produce exactly the same legal effect as the GB Act as amended. The Department considers that anyone who complies with the law in GB will comply with the law in Northern Ireland as set out in the Bill.
COMMENTARY ON CLAUSES
Clauses 1 to 6 of the Bill are equivalent to section 3 of the 1971 GB Act as amended by the Great Britain Statutory Instruments referred to in paragraphs 16 and 18 of this Memorandum.
Section 3 of the GB Act deals with the general prohibition on charges unless one of four conditions is met. It also sets out the details of each of those four conditions and the offence of demanding payment without complying with one of those conditions.
Clauses 1 to 6 of the Northern Ireland Bill have restated these provisions separately. This approach removes the need for unnecessary cross-referencing and the text has been consolidated and simplified.
Under Clause 7 of the Bill, the Department will have power to amend the Schedule to the Bill by Order subject to negative resolution. An Order under that clause may also make any necessary transitional provisions and amendments to provisions referred to in the Schedule.
The Schedule to the Bill sets out certain matters which are referred to in clauses 3, 4 and 5. It mirrors the provisions of the Schedule to Regulatory Reform (Unsolicited Goods and Services Act 1971) (Directory Entries and Demands for Payment) Order 2005 (S.I. 2005/55). The details have, however, been set out in a different sequence to match the sequence in which they occur in the Bill.
Clause 8(2) repeals Articles 5 and 6 of the 1976 Order as they are being replaced by the provisions of the proposed Bill. Article 2(3) of the 1976 Order is being amended because it will need to refer to the conditions in paragraph 4 of the Schedule to the Bill.
FINANCIAL EFFECTS OF THE BILL
21. If enacted, the Bill is not expected to lead to any increase in public expenditure or public sector staffing. The legislation on unsolicited goods and services is currently being enforced by the Department’s Trading Standards Service and the amendments made by the proposed Bill are unlikely to lead to any significant increase in enforcement activity.
HUMAN RIGHTS ISSUES
22. There are no human rights issues. The Bill re-enacts, with minor technical amendments, the existing law in this field.
EQUALITY IMPACT ASSESSMENT
23. Equality screening did not reveal any negative impact on any of the groups set out in section 75 of the Northern Ireland Act 1998.
SUMMARY OF THE REGULATORY IMPACT ASSESSMENT
24. The Bill would ensure compliance with the E-Commerce Directive, remove a potential obstacle to contracting by electronic means in the directory publishing field and provide a quick and cost-effective means for advertisers to contract for a directory entry should they choose to use it.
25. The Department considers that the Bill strikes the right balance of: removing obstacles to contracting by electronic means; ensuring compliance with the E-Commerce Directive; and ensuring, as far as possible, business advertisers do not incur costs due to scams.
LEGISLATIVE COMPETENCE
26. The Minister of Enterprise, Trade and Investment had made the following statement under section 9 of the Northern Ireland Act 1998:
“In my view the Unsolicited Services (Trade and Business Directories) Bill would be within the legislative competence of the Northern Ireland Assembly.”
SECRETARY OF STATE CONSENT
27. The Secretary of State has consented under section 10(3)(b) of the Northern Ireland Act 1998 to the Assembly considering this Bill.