Northumberland Council (15 019 772)

Category : Environment and regulation > Trading standards

Decision : Upheld

Decision date : 16 Nov 2016

The Ombudsman's final decision:

Summary: The Council took too long to investigate Mrs C’s complaint about the builder she contracted to build a house for her. It also communicated poorly with her. It did not act with fault in the way it decided whether to prosecute the builder. The Ombudsman will close the complaint as the Council will apologise and pay Mrs C £250 to reflect the time, trouble and frustration its delay has caused her.

The complaint

  1. The complainant, whom I will call Mrs C, complained the Council’s Trading Standards team took too long to investigate her complaint about a builder she contracted to build a house. It did not keep her informed about its investigation and the action it was planning against the builder. She also complains it dropped its original case under consumer protection legislation to pursue a fraud case against the builder which was unlikely to be successful. The Council’s delay meant it could not pursue its original consumer protection case against the builder as it was out of time.

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The Ombudsman’s role and powers

  1. The Ombudsman cannot investigate late complaints unless she decides there are good reasons. Late complaints are when someone takes more than 12 months to complain to the Ombudsman about something a council has done. (Local Government Act 1974, sections 26B and 34D)
  2. The Ombudsman investigates complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. She must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, she may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1))
  3. If the Ombudsman is satisfied with a council’s actions or proposed actions, she can complete her investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i))

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How I considered this complaint

  1. I discussed the complaint with Mrs C on the telephone and by email. I considered all the information she sent me. I also considered the information the Council sent me.
  2. I gave Mrs C and the Council an opportunity to comment on these draft findings. I have taken the comments of both parties into account before coming to a final decision.
  3. Mrs C complains about Council’s Trading Standards investigation of alleged offences by her builder committed between 2013 and 2015. The Ombudsman cannot usually investigate late complaints. However, I have exercised discretion to investigate back to 2013 because Mrs C only became aware of the Council’s decision not to take legal action against the builder in early 2016.

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What I found

  1. In 2013 Mrs C bought a plot of land in the Council’s area on which she intended to build a house using a bridging loan. She was to repay the loan through equity release when the house was finished.
  2. Mrs C used the website of a national trade association for the construction industry to get tenders from members to build the house for a fixed price. As part of the financing arrangement, she needed the builder to be accredited by a national organisation providing warranties and insurance for new homes and for the house to be finished in early 2014.
  3. Although several builders contacted her, only one was prepared to enter into a fixed price contract for the entire build. His advertisement used the logo of the accrediting trade association. Mrs C entered into a fixed price contract with him. She has since alleged the builder persuaded her to sign a blank contract into which he later inserted an agreement for her to pay extra charges. She agreed with the builder that he should use an independent building inspector he recommended to inspect the works.
  4. Mrs C says she paid the builder nearly the full fixed price agreed over the course of the build. The builder built the shell of the house but asked her for extra sums of money to connect the property to mains water, sewerage and the national grid. It also lacked internal partitions, stairs, doors and windows.
  5. When she could not pay these extra sums, her relationship with the builder broke down and the builder refused to continue work.
  6. Mrs C asked other local building firms to quote to complete the work. She says they told her there were significant flaws in the way the house was built and declined to complete the job.
  7. Mrs C also discovered the builder had sent her hugely inflated invoices for work he said he had done when this was completed by the electricity and water companies at a fraction of the invoiced cost. She also complained the electricity company had paid the builder compensation after he made a fraudulent claim about a mobile home on site that he claimed was his and was unusable because of a lack of power. In fact, the mobile home belonged to Mrs C and the builder had also invoiced her for work done on it.
  8. Mrs C contacted the police as she believed the builder had altered the contract and had tried to charge her for ‘extra’ work that was included in the original contract. She believed this amounted to fraud. She also later complained the building inspector was complicit in the attempt to defraud her and had not inspected the house properly.
  9. The police referred the case to the Council’s Trading Standards team in early 2014. An officer (Officer 1) from the team started investigating possible offences under the Consumer Protection from Unfair Trading Regulations 2008. These related to the quality of the build and the builder’s use of the trade association’s logo. Officer 1 also investigated possible offences under the terms of the Fraud Act 2006 about invoicing Mrs C for extra works, inflating the costs of this and the builder’s claim to the electricity company.
  10. Officer 1 met Mrs C to discuss the criminal offences he was investigating. He also told her he could not force the builder to repay the money she had given him. She needed to take her own legal action against the builder through the civil courts. Mrs C had already instructed a solicitor to do this, but believed that if Trading Standards’ took action against him, this would strengthen her case. In her response to my draft decision, Mrs C says she wanted the Council to take action to alert the public about the type of individual the builder was.
  11. As Mrs C could not pay back the bridging loan, the finance company repossessed the house and land. Mrs C estimates she has lost over £250000.
  12. Over the spring and summer of 2014, the Council’s records show the officer worked to gather evidence and witness statements from Mrs C, the builder, building inspector and third parties to find out whether there was a case for prosecution.
  13. In April 2014, Mrs C’s surveyor provided a report which said the flaws were so bad the property should be demolished and rebuilt. The Council instructed an independent survey of the house. The survey also showed many significant flaws in the build and recommended demolition.
  14. However, the builder commissioned his own survey which stated that while there were flaws, they were repairable and would have been remedied before completion. Mrs C says the ‘repair’ works included underpinning the house and that the surveyor could not guarantee this would resolve the issues. An earlier survey commissioned by Mrs C’s financing company stated the build quality was reasonable.
  15. The Council’s records do not show how the Council’s investigation advanced in the second half of 2014. Mrs C says Officer 1 was on long term sick leave for at least some of this period.
  16. It is clear Officer 1 passed the file to the Council’s legal team in January 2015 for it to consider whether it should prosecute the builder.
  17. Mrs C contacted the Council at least six times in the next six months asking for updates on the Council’s investigation. Officer 1 or another Trading Standards officer (Officer 2) responded to these update requests but had little to report other than the Council’s legal team was still considering the case. There is no evidence officers contacted Mrs C proactively during this time.
  18. Meanwhile, Mrs C contacted both the trade association and accrediting association. These associations have since taken action against the builder.
  19. In September 2015, the Council told Mrs C its legal team considered part of the case needed further work. It did not tell her it was only considering the fraud case and did not intend to prosecute the builder under consumer protection regulations.
  20. Officer 2 took over the investigation and completed the extra work. Between September and March 2016, the evidence I have seen indicates Officer 2 worked to get the information the Council’s legal advisors wanted. There is also evidence Officer 2 contacted Mrs C at least three times to give her updates.
  21. In March 2016, Officer 2 told Mrs C the Council would not prosecute the builder as the legal team decided the evidence on the fraud case was inconsistent and not strong enough to prosecute the builder. She also told her the Council had dropped the consumer protection case in late 2015. This was because there was a time limit on taking such action which had nearly expired.
  22. Mrs C complained the Council had not told her early enough that it had dropped its case under consumer protection regulations in favour of a fraud case that stood little chance of succeeding. She wanted it to restart the consumer protection case so the builder would have to give an account of its actions in court. The Council refused to do so because such action was time-barred. Mrs C complained to the Ombudsman.

Analysis

  1. Trading Standards act for the public benefit, and not for an individual. As Officer 1 correctly told Mrs C, its investigation of her complaint could not lead to compensation for her financial losses. She needed to take her own legal action through the civil courts for this. Trading Standards also do not have to prosecute a trader even if it is clear a criminal offence has been committed and a court is likely to find the trader guilty.
  2. Mrs C believes prosecution by Trading Standards would have strengthened her civil case against the builder and building inspector. However, she says her main aim was for the builder to have to defend himself in court and to alert other people to his actions.
  3. It was for the Council to decide whether to take legal action against the trader. It does not have to take action to support someone’s civil case. It is also entitled to rely on the legal advice it receives in making its decisions.
  4. I consider it did properly consider whether to take action under either the Consumer Protection from Unfair Trading Regulations or the Fraud Act. Mrs C does not agree with the Council’s decision but as it properly considered whether to prosecute, the Ombudsman cannot criticise the decision it reached.
  5. I consider the Council delayed in the way it investigated the case in the latter half of 2014 and in 2015. I also consider it communicated poorly with Mrs C by failing to keep her updated, including not informing her it had dropped its investigation under consumer protection regulations early enough. This is fault.
  6. I have considered what injustice the Council’s fault has caused Mrs C. I consider this largely amounts to the time and trouble she was put to in pursuing her complaint and the frustration this caused her. This is because Trading Standards had no duty to prosecute the builder even if it believed he had committed an offence. Its delay and ultimate decision not to prosecute him should not have affected her own civil case.

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Agreed action

  1. The Council has agreed to take the following action to remedy the injustice its fault has caused Mrs C. Within one month of the date of my final decision it should:
    • apologise formally for its delay and poor communication; and
    • offer Mrs C £250 in recognition of the time and trouble Mrs C was put to and the frustration this caused her.

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Final decision

  1. My decision is the Council acted with delay in investigating Mrs C’s complaint about a builder she employed. It also communicated poorly with her. If it now takes the actions outlined above, the Ombudsman will close the complaint as the injustice to her will be remedied.
  2. The Council did not act with fault in the way it considered whether to take legal action against Mrs C’s builder.

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Investigator's decision on behalf of the Ombudsman

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