Company directors are being asked for their views on government plans to introduce a new mechanism for bringing collective consumer court actions.

The Department for Business Innovation and Skills launched a consultation on 2 December 2009 on the role and powers of the Consumer Advocate, who will educate consumers on their rights and who would be a champion for groups of consumers who have suffered a loss at the hands of a business. Views must be submitted by 5 March 2010.

The Consumer Advocate, due to be appointed in 2010, will have powers, through new legislation, to bring collective legal actions on behalf of groups of consumers following a breach of consumer protection law. These multi-party legal actions will only be brought if other routes have been tried or have been found to be inappropriate.

The Advocate will have powers to:

• Take legal actions on behalf of consumers following a breach of consumer protection law;
• Distribute compensation to UK consumers from ill-gotten funds seized by overseas enforcement agencies;
• Tackle unfairness in consumer credit agreements.

He or she is likely to have a high media profile, in order to maximise adverse publicity against businesses alleged to have breached consumer protection laws. Their scope could include Scotland and Northern Ireland as well as England and Wales.

The consultation considers the potential extent and nature of the Consumer Advocate’s powers, and the most appropriate role for him or her to take.