On Wednesday 7th October 2015, Gibraltar saw the official opening of the Office of Fair Trading (‘OFT’) at their premises at Suite 975 Europort, Europort Road, Gibraltar.
The Fair Trading Act (‘the Act’) seeks to:
1. establish and provide for the functions of the OFT and the Office of Fair Trading Commission (‘OFTC’);
2. encourage businesses to comply with consumer law and to improve their trading practices;
3. enable action to be taken against conduct that may significantly harm the interests of consumers;
4. strengthen the rights of consumers and give statutory force to a level playing field for businesses;
5. improve the consumer experience in Gibraltar;
6. streamline, simplify and speed up Gibraltar’s licensing system;
7. establish a single point of contact; and
8. establish enforcement powers for the licensing authority, in cases of non-adherence by licensees.
Trade licences become Business Licences
All applications for a trade licence will, from the 7th October 2015, come under the umbrella of the new ‘business licensing’ regime found in the Act and applicants are required to use the new forms set out in the Fair Trading Regulations. There is now a Single Point of Contact where the applicant can register for all the relevant parts of setting up a business (e.g., income tax registration, town planning, environmental issues), all under one roof.
Those who have existing licences will have their licenses re-designated to the new nomenclature and therefore brought under the new licensing regime at the point of their renewal. Transition to the new business licensing regime can also be done earlier on a voluntary basis. A notable change under the new Act that could catch some licensees out is that licences do not run from calendar year 1st January to 31st December, but from the date the licence is granted. There are also business types which previously may not have required a licence and now do, so it is a good idea to contact your lawyer and check whether your business requires a licence under the Act.
Offences under the Act
Businesses should be aware of the new offences created under the Act. If a licence holder fails to produce a licence upon being lawfully required to do so or hinders or obstructs the procedure, the licence holder will be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale. On conviction, the licensing authority will cancel the licence held by that licence holder.
One property – multiple licences
Previously a licence could only relate to a single property. Under the new Act, the licensing authority of the OFT has discretion to allow more than one licence to be issued in respect of the same premises. To do so, the Authority will need to be satisfied that the existing licence can ‘co-exist’ in a compatible manner with a licence to carry on business of a different type at the same premises. Further, the requirement to have premises may be waived entirely in cases where the licensing authority is of the opinion that such business does not need premises in which to operate, such as, but not limited to, online services.
Extension of licences
Previously, there was no administrative procedure for a licensee to extend their licence. In practice, this led to existing licence holders making manual amendments to a ‘new applicant’ form. Under the new Act, there is now provision for the licensing authority to issue an extension to an existing licence, which will also be processed faster – subject to an applicant submitting all correct and relevant information and no objections being received by the Authority, a new licence or an extension will be granted within 3 business days of receipt of all documentation by the licensing authority.
Provisional licences may be granted to start-ups if the applicant has premises that are being or will be constructed for the purpose of being used for a business in Gibraltar. Provisional licences may also be granted where premises are being altered for that purpose. This provisional licence would only be granted on the condition that such premises are fit for use within 12 months from the date of issue of the provisional licence, following which the provisional licence automatically expires.
One of the main changes from the old Trade Licensing Act is the law relating to objections to new licences. The new Act removes the statutory discretion contained in the old Act to refuse a licence on the basis that the needs of the community in Gibraltar or in the area where the trade or business is to be carried on, are adequately provided for. This is designed to encourage new businesses in Gibraltar and avoid monopolies. It is the Government’s aim in this legislation that the new streamlined application system will be an effective way of bringing in new ideas and business to Gibraltar.
Complaints can be made to the OFT, either by individuals or Designated Consumer Bodies (‘DCBs’. DCBs are appointed by the Minister and published in the Gazette – the reasoning behind having DCBs is that consumers may not always have the knowledge or information necessary to judge whether markets are failing them – known as ‘information asymmetry’. DCBs can submit ‘super-complaints’ to the OFT, where they consider that a feature or combination of features of a market for goods or services is, or appears to be, significantly harming consumer interests. In this way, the designated bodies, on behalf of consumers, refer the matter to the OFT via a ‘super-complaint’, which is simply a fast-track to ensure that these complaints are considered within 90 days from the receipt of all information relating to the complaint. Such complaints would relate to the market as a whole, not a particular individual or business.
A consumer or a business may also make a complaint to the OFT if in its opinion, any feature or combination of features of a market in Gibraltar for goods or services is, or appears to be, significantly harming consumer interests. The OFT does not have the same statutory obligation to fast-track its response within 90 days, as with super-complaints, but does need to provide the consumer with a response within 120 days from the receipt of all information relating to the complaint. In accordance with section 19(2) the OFT’s response must state whether it has decided to take action in relation to the complaint and if so, details of the proposed action.
The OFT is a quasi-judicial body of the office with responsibility for implementing decisions, upholding consumer law and hearing referrals from the OFT alleging that a person or business has breached consumer protection law. The Commission does not initiate inquiries independently; all of its activities are undertaken following a reference to it by the OFT.
ISOLAS was engaged by the Government of Gibraltar in the drafting of the Act and is able to advise clients on all matters relating to both the old trade licensing regime and new model under the Act. ISOLAS was established in 1892, making it the longest established firm in Gibraltar. Since then, and given our more than 120 years in the local legal profession, ISOLAS is today proud to be considered one of the leading law firms in Gibraltar. ISOLAS is consistently ranked as one of the leaders in the market by all the major international directories .ISOLAS is proud of its reputation for combining expert legal advice with commercial pragmatism and we are valued by our clients and partners for being practical and confident in the advice we give, a natural consequence of the close, partner-led relationship with the client we work to achieve.
It is our focus on our interaction with the client that, we believe, forms the basis of our success in establishing long-term relationships with a significant proportion of our client base. The commerciality of the advice that we provide, close attention to cost considerations, our professional network in Gibraltar and beyond, as well as our dedication to leveraging information technology solutions for the benefit of the client, make for a compelling package of advantages over our competition in the local marketplace.
ISOLAS, trusted since 1892