Commentary on Sections New section 31E – Sale or other disposal
43.New section 31E provides for the sale or other disposal of infringing articles by the ODA. It will apply in the following circumstances:
44.If the ODA thinks that there is a realistic prospect of selling the infringing article it must take reasonable steps to sell it at the best price that can reasonably be obtained. But, if (having taken such steps) the ODA fails to sell the article, it may dispose of it as it thinks appropriate. Likewise, if the ODA does not think that there is a realistic prospect of selling the article, it may dispose of it as it thinks appropriate. See new section 31E(2) and (3).
45.In a case where the ODA has attempted to return an infringing article, but the owner has disclaimed it or refused to accept it, the proceeds of sale under new section 31E must be applied towards the ODA’s costs of exercising functions under the 2006 Act in relation to the regulation of advertising and trading: see new section 31E(4).
46.In a case where the court has awarded costs to the ODA against the owner and the costs have not been paid within 28 days, the proceeds of sale under new section 31E must be applied in paying the amount of the costs that are unpaid (with any excess being given to the owner of the infringing article): see new section 31E(5). If, in such a case, the ODA fails to take reasonable steps to sell the infringing article for the best price that can reasonably be obtained, that failure is actionable against the ODA by any person suffering loss (but the validity of any sale is not affected): see new section 31E(6).
47.If, having undertaken such enquiries at it thinks appropriate, the ODA fails to establish where the owner of an infringing article is for the purpose of giving him or her any proceeds of sale that exceed the amount of an unpaid costs award, it may apply to a magistrates’ court (or, in Scotland, a sheriff): see new section 31E(7). Where the court (or sheriff) is satisfied that the ODA has made reasonable efforts to establish where the owner is, it may make an order authorising the ODA to apply the excess of the proceeds of sale towards its costs of exercising functions under the 2006 Act in relation to the regulation of advertising and trading: see new section 31E(8) and (9). In considering whether to make such an order, the court must have regard in particular to the value of the excess proceeds and the likely financial or other effects of making the order: see new section 31E(10).
48.Finally, subsections (10) to (12) of section 1 amend sections 37 and 38 of the 2006 Act (which make provision for Scotland and Northern Ireland respectively). Subsection (11) provides that, in Scotland, seized infringing articles may be held by constables or ODA enforcement officers. Where they are held by a constable, they must be returned when retention is no longer justified by a purpose for which infringing articles may be seized (see sections 22(5) and 28(2) of the 2006 Act), unless:
49.Where, in Scotland, seized infringing articles are held by the ODA, they must be dealt with in accordance with new sections 31A to 31E of the 2006 Act (which are modified, in their application to Scotland, by subsection (11)).