Bringing Proceedings

June 19th, 2014

As is well known, Section 222(1) of the Local Government Act 1972 authorises a local authority to prosecute (or defend or appear in) “any” legal proceedings, where they consider it “expedient for the promotion or protection of the inhabitants of their area”.  In Oldham MBC v Worldwide Marketing Solutions Ltd [2014] EWHC 1910 (QB) the High Court held that the authority had been fully entitled to conclude that proceedings, against a trader who had given but then breached an undertaking not to use misleading advertising in selling to other traders, was expedient in the interests of the inhabitants of their area, notwithstanding that the trader had subsequently left that area.  Phillips J said:-

24.       There were both broad policy reasons and specific aspects of this case which, individually, and certainly if considered cumulatively, justified such a conclusion.

25.        First, the inhabitants of an area have a clear and obvious interest in the local authority taking reasonable steps to procure that undertakings it has extracted from traders (such as that given by the defendants in this case) are enforced through proceedings where breached. If such steps are not taken, and undertakings are seen to be breached with impunity, the force and utility of such undertakings will be undermined, lessening their effect and usefulness and consequently leading to greater expense in taking proceedings instead of or in addition to accepting undertakings. It follows that a local authority can properly take the view that it is in the interests of the inhabitants of its area to bring (and to be seen to be bringing) proceedings against a trader who has given but then breached an undertaking, even if the trader has subsequently left the authority’s area.

26.        Second, given the timing of WMSL’s re-location (shortly after the search warrant was executed at its Oldham premises), the short distance the business moved and Mr Kay’s continued connections with the Oldham area, the Council was entitled to perceive a real risk that WMSL would return to its Oldham area in the foreseeable future.

27.        Third, the Council was entitled to take into account the likelihood (if not inevitability) that WMSL’s future sale business, whilst conducted nationally, would include sales calls to businesses based in Oldham. Whatever the content and merits of the four complaints which had been received from Oldham based businesses, their existence demonstrate that businesses in Oldham are by no means excluded from the scope of WMSL’s sales calls. If the Council were considering the matter afresh and in isolation, there might be a question as to whether the risk to local businesses justified taking proceedings. But where the Council had already investigated sales practices in question, obtained undertakings and executed a search warrant to establish ongoing breaches, it could readily conclude that the final step of obtaining an injunction was justified to protect the interests of its inhabitants.

28.        As has been emphasised in the authorities referred to above, s.222(1) is widely worded, imposing no express restriction on what a local authority may properly consider to be expedient to promote or protect the interests of its inhabitants. … there is no basis for limiting the matters the local authority may consider to activities taking place within the relevant area or directly affecting its inhabitants. … The fact that future legislation may permit a local authority to act outside its area without express restriction does not mean that such an authority cannot currently do so where it considers it expedient to do so in the interests of its inhabitants, as permitted by s.222(1).”

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