Northumberland Council (16 006 707)

Category : Environment and regulation > Trading standards

Decision : Not upheld

Decision date : 22 Mar 2017

The Ombudsman's final decision:

Summary: The complainant, Mr B, has not been able to enforce the court judgement he has against Mr X because he has gone bankrupt. Mr B considers the Council could have prosecuted Mr X for fraud and he could then have been able to successfully make a claim against Mr X for the £11000 he is due. It is not possible to say that fault by the Council has caused Mr B’s claimed injustice. There was delay by the Council but that has not caused Mr B significant injustice.

The complaint

  1. Mr B complains about the Council’s investigation under its trading standards powers of a builder, Mr X. He considers the alleged failings in the Council’s handling of the matter meant he has been unable to recover money he lost from the builder.

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The Ombudsman’s role and powers

  1. 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’. She provides a free service, but must use public money carefully. She may decide not to start or continue with an investigation if she believes:
  • the fault has not caused injustice to the person who complained, or
  • the injustice is not significant enough to justify her involvement, or
  • it is unlikely further investigation will lead to a different outcome, or
  • she cannot achieve the outcome someone wants.

(Local Government Act 1974, section 24A(6))

  1. The Ombudsman cannot investigate a complaint about the start of court action or what happened in court. (Local Government Act 1974, Schedule 5/5A, paragraph 1/3)

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How I considered this complaint

  1. I considered the complaint and spoke to Mr B. I asked the Council for its comments on the complaint and additional information. I sent a copy of a draft of this statement to Mr B and the Council and invited their comments.

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What I found

  1. Mr B engaged a builder, Mr X, to do some building works. Mr B paid a deposit of almost £8,500. Mr X did not start the works and Mr B discovered some bad reviews about Mr X. Mr B contacted the Council and was advised the contract he had entered into was invalid and the Council were aware of complaints about Mr X’s work and trading practices. Mr B decided to cancel the contract. Mr X would not refund the deposit but did agree to pay it back at £200 a month. That did not happen and Mr B made a claim against Mr X in the County Court. The Court found in Mr B’s favour and he was awarded £11,000. Mr X was then declared bankrupt so has not paid Mr B the £11,000 the court awarded.
  2. The Council investigated Mr B’s complaints about Mr X. The Council had received other complaints. The Council decided to prosecute Mr X for three charges of fraud and one of theft. Mr X elected for trial in the Crown Court. The Council decided not to proceed with the prosecution.
  3. Mr B complains about the Council’s investigation of Mr X. He considers the Council should have had a robust case against Mr X and there should have been no grounds for the Council to discontinue the prosecution. He says that had the prosecution continued and Mr X been convicted then his award of £11,000 against Mr X would still have been enforceable when he came out of bankruptcy.

Assessment

Jurisdiction

  1. There are restrictions on the matters we can investigate. One restriction is that we cannot investigate matters that have been before a court. Once a council has embarked on court action then the Ombudsman cannot consider any decisions made by the Council about the action.
  2. A key element of Mr B’s complaint is that it was wrong the Council withdrew the court action. That decision was part of the court action and does not, therefore, come within the Ombudsman’s jurisdiction.

Injustice

  1. Our role is to consider whether fault by the Council has caused an injustice to the complainant. If it has we will ask the Council to provide a remedy. But we have to be able to establish a direct link between the fault by the Council and the injustice. Mr B properly took legal action against Mr X. He won his case. The reason he has not been able to recover the award the court made is because Mr X has gone bankrupt. It is not because of some direct action by the Council.
  2. Mr B argues the reason the Council had to withdraw from the prosecution was because the case was weak and this was because of earlier (before the court action started) failings in how the Council investigated and prepared the case.
  3. Mr B argues that had the Council continued with the prosecution against Mr X and won then he would have been able to enforce the judgement against him. It is the case that if fraud is proven then it would be possible for creditors to pursue the debt after bankruptcy. But it is not possible to say what the outcome would have been of the Council’s prosecution against Mr X. And, even if it had been successful, it would not be possible to say whether Mr B would ever have been able to make a successful claim against Mr X. I cannot, therefore, make the link Mr B seeks between any fault by the Council in its preparation of an investigation of the case against Mr X and his claimed injustice. There are too many uncertainties and possible different outcomes to say some fault by the Council has caused the injustice Mr B claims.
  4. Mr B further argues the Council was aware of Mr X’s trading practices for several years and had it taken appropriate action sooner then he would not still have been trading. Or if he was still trading then it would have been on a proper basis with some controls in place.
  5. The Council has provided some limited information about the other complaints it received. It is the case the Council was aware of complaints about Mr X for several years. I do not have sufficient information to say whether there was any fault in how the Council considered those earlier events. I do not intend to investigate those matters further as I could not say if there was any fault by the Council that it caused significant injustice to Mr B. Regardless of any action the Council could have taken Mr X could still have been trading and Mr B could have been in the same situation. I could never say the Council should have taken some action which would have meant that Mr B would not have been in the position he found himself in.
  6. This same argument applies to Mr B’s point that the Council could have taken action against Mr X under the Enterprise Act. The Council has accepted that it could have used the powers it had under the Enterprise Act when it first became aware of Mr X. It considers that once it decided to prosecute then the Enterprise Act powers would not have been the appropriate route. Mr B disagrees and says that it would have been possible for both to run concurrently. But again the key point here is that I cannot say, on the balance of probabilities, that if the Council had taken action under the Enterprise Act it would have made any difference to Mr B’s position.
  7. Mr B complained that he had to resubmit evidence to the Council and that it lost the original contract document. There was a difference of view between the Council and Mr B on when the Council had the original contract. But the Council has now returned the document to Mr B so I do not consider that difference of view is of any significance now. The Council did ask for information before Mr B went on holiday but the officer made it clear that there was no rush and Mr B did not need to provide it before he went away.
  8. The Council has accepted there was delay in the early stages of the investigation once Mr B had made the complaint.

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Final decision

  1. It is not possible to say that fault by the Council has caused Mr B’s claimed injustice. There was delay by the Council but that has not caused Mr B significant injustice.

Parts of the complaint that I did not investigate

  1. As explained above I have not investigated the decision to discontinue the court action.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman

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