Hauliers' agreements must be in the public interest and must be registered
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by John Darker, AMB1M
IT will come as no surprise to the senior officials of trade associations in road transport that service industries Wine within the provisions of I the Restrictive Trade Practices law on March 22 (CM last week).
For years there has been speculation on how soon such legislation would be applied to services. Since 1956, when the first Restrictive Trade Practres Act came into force, over 3 000 agreements on the supply or manufacture of goods have been registered. Of 37 cases contested before the Restrictive Trade Practices Court, only 11 have been successfully defended as being in the public interest. There have been over 300 uncontested court hearings in which no attempt was made to justify the agreement.
In just over 170 agreements directions were given not to refer particular agreements to the court. The great majority of other agreements on the register have been voluntarily abandoned, while others have had restrictions which might have been against the public interest deleted.
If in service industries only a handful of restrictive ractices out of—presumably— any thousands receive endorse tent as being in the public int rest then a lot of comme1.cia1 arrangements now found to be profitable by the partners or beneficiaries, will end.
The definition
A restrictive agreement according to the official guide Restricttve Trading Agreements and Recommendations Relating to Services—A Guide to Reg tration (available from the 0 e of Fair Trading, Chancery H use, 53 Chancery Lane, Lndon WC2A 1SP) is any agreement which has the following features :
(a) two or more persons (individual traders, partner hips, or companies, whether incorporated under the Companies Act or not) who are engaged in business in the United Kingdom in the supply of service S are party to it; (b) two or more parties accept restrictions under it, ie some limitation on their freedom to make their own decisions about certain matters in connection with supplying or obtaining services ; these matters include : charges, fees, prices or commission rates, etc; the extent to or the manner in which the business is to be done ; persons with whom business is to be done ; areas or places in or from which business is to be done.
The wide scope of the new legislation is apparent. " Agreement" covers both oral and written agreements and includes agreements that are not enforceable in law (so-called gentlemen's agreements). " Arrange ments " or understandings, however informal, between two or more persons that they will act or refrain from acting in a certain way come within the ambit of the law.
If a trade association—even a local branch—issues rules or recommendations about charges or standard terms or conditions, or as to how their members should conduct their business then these may constitute a restrictive practice which must be registered.
'Notional' agreements
Specific recommendations of a restrictive character made by associations to their members, or to a class of members, also require to be registered. While not agreements in the ordinary sense they are regarded "as involving a notional restrictive agreement by members to comply with them."
Many readers will recall the furore when Mr Aubrey Jones was running the National Board for Prices and Incomes and the Road Haulage Association issued recommendations to members as to the need for a national rates increase. The P and I Board promptly prepared a documented report designed to outlaw such general recommendations. "Blanket" recommendations for rates increases have since been qualified, though industry spokesmen have not refrained from pretty direct exhortations on the need for higher haulage rates or bus fares. An Appendix (2) in the booklet ligts agreements which are excluded in a Schedule to the Order introduced by the Secretary of State for Prices and Consumer Protection. They include "international sea transport services" for passengers or goods "wholly or partly by sea, the carriage by sea and carriage otherwise by sea (forming) part of the same service."
An agreement to which the only parties are road passenger transport operators, and the only restrictions accepted thereunder relate to the provision of stage carriage services or express carriages or both is excluded.
Know-how
An exclusive dealing agreement between two persons only (neither being an association— broadly defined as meaning a trade association) "for the supply of services from one to the other and under which the only restrictions relate to the supply of such services to, or the obtaining of them from other persons" does not need to be registered.
Nor does what is termed a "know-how" agreement between two persons only " for the exchange of technical information to be applied in providing a service, provided that the only restrictions relate to the form or manner in which the service is to be supplied."
Terms of employment and certain professional services are excluded from the legislation, but the British end of an international road transport service may need to register a restrictive agreement even if the foreign partners accept restrictions.
All restrictive agreements operated in the services sector of industry must be registered before June 21 next and any new agreements made on or after March 22, 1976 must be submitted to the Office of Fair Trading before they come into force, or within three months of making the agreement—whichever is the earlier.
What are the penalties fornon-registration ? One consequence is that any such agree ment is void in respect of its restrictions and it is unlawful for any party to the agreement to give effect to them or to enforce or try to enforce compliance. Failure to register is not a criminal offence, but the Fair Trading director-general may apply to the court for an order restraining any party from: (a) giving effect to the restrictions or enforcing or purporting to enforce them and (b) giving effect to, enforcing or purporting to enforce, the restrictions in any other registrable agreement particulars of which have not been recorded by the OFT.
In many service industries there are bound to be honest doubts as to whether a particular agreement or variation of an agreement is subject to registration.
Fail-safe
The guidebook suggests that a " fail-safe " procedure is best. If details of an agreement are sent to the OFT within the proper time and the authority considers that the agreement is not registrable then it will not be registered.
The procedure for registering agreements is described in the Guide. It appears that particulars may be furnished by or on behalf of any one party to an agreement, and this may • seem an odd arrangement since .the other party or parties might be totally unaware that the details of what had been thought to •be a confidential, commercial arrangement were to be passed to a public official. But that is what the Guide says ; so any party to a restrictive agreement would be wise to make sure that there is no unilateral release of information.
Three copies of any relevant document must be sent to the OFT for inclusion in the register and one copy of each document must be identified by the signature of the person furnishing them. The person sending in the set of documents is also required to certify that the particulars are accurate and complete.
It is difficult to escape the