Any big business that relies upon an automated system for billing and issuing demand letters needs to be aware of the recent Court of Appeal ruling in the case of Lisa Ferguson v British Gas Trading  EWCA CIV 46. In this ruling, the Court of Appeal refused to strike out a claim of harassment by the Claimant against British Gas Trading (BGT) under the Protection from Harassment Act 1997.
The Claimant was an ex customer of BGT. Following her switch to another supplier, she continued to receive letters from BGT threatening to cut off her gas supply, start legal proceedings against her and report her to credit rating agencies. All of the relevant bills had been paid and no money was in fact due and owing. The threat to her credit rating was of particular concern to the Claimant since she was a self-employed property developer.
The Claimant commenced proceedings against BGT under the 1997 Act (a piece of legislation that was in fact originally enacted to outlaw stalking and other types of threatening behaviour after a well-publicised murder case in the 1990s).
The proceedings were transferred to the High Court, where BGT applied to have the claim struck out on the basis that it disclosed no genuine cause of action. This application was rejected by the Judge at first instance. BGT appealed and the Court of Appeal (Lloyd, Sedley and Jacob LJJ) dismissed the appeal.
The Court of Appeal Ruling
The Court of Appeal ruling has a number of implications for big businesses who rely upon automated systems for billing and issuing demands to individuals:
- Jacob LJ held that at the very least, it was strongly arguable that BGT's conduct was capable of being sufficiently serious to establish a claim under the 1997 Act. The conduct should be considered on a case by case basis and in context.
- The Court of Appeal rejected BGT's argument that the Claimant knew that the correspondence was computer generated, so it should not be taken as seriously as if it had come from an individual. Jacob LJ said that individuals were responsible for programming the system and the letters would be read by real persons who were likely to suffer real anxiety and distress.
- The Court of Appeal also rejected BGT's argument that even if the conduct as a whole, if carried out by an individual trader, would amount to harassment, it was not enough to prove a case against a large corporation. The Court of Appeal took the view that the Claimant did not have to go as far as to prove actual knowledge of the conduct at issue. Jacob LJ thought that at the very least BGT ought to have known that the conduct complained of could amount to an harassment. In addition, BGT could not rely on a "defence of incompetence" or "the right hand not knowing what the left hand was doing".
- The consequences of falling foul of the 1997 Act are potentially very serious. The 1997 Act creates not only a civil tort under Section 3 (which can lead to an injunction and/or damages for anxiety caused), but also a crime under section 2. The key difference between the crime and the tort is the standard of proof. Any person found guilty of a criminal offence under section 2 is liable to imprisonment or fine and can be made subject to a restraining order. A defence is available however if the conduct is authorised by law, pursued for purposes of a criminal investigation or "reasonable" in the particular circumstances.
It is also worth noting that, although this did not form any part of the argument before the Court of Appeal, the Claimant also put forward an additional claim for BGT's breach of the Data Protection Principles under section 4(4) of the Data Protection Act 1998.