Rage against the machine

Harassment claims against corporate bodies bombarding clients with computer-generated correspondence could be set to rise following the Court of Appeal's decision to dismiss an appeal against an order not to strike out a claim for damages under the Protection from Harassment Act 1997 brought against British Gas.

The case of Ferguson v British Gas [2009] EWCA Civ 46 was started by Ms Ferguson, a former customer of British Gas who had transferred to a new supplier but to whom British Gas continued to send invoices and letters with threats to cut off her supply, start legal proceedings and report her to credit rating agencies. Ms Ferguson complained and received assurances that this would stop but the correspondence continued. The court said it must have seemed like 'a monster machine out of control moving relentlessly forward'. British Gas sought to strike out the claim relying on two defences: what the court called the 'gravity' test and the 'corporate liability' point.

Real people

Because the Act allows for both civil and criminal liability, the court said, the 'gravity' test relied on suggested that the course of conduct had to be 'rather serious', otherwise merely annoying or aggravating matters of everyday life would be criminalised. The court noted that conduct had to be grave before founding liability but stated the only difference between the offence and the tort was the standard of proof. It had never generally been accepted that a civil wrong should be restricted because it was also a crime. On the evidence it was strongly arguable that British Gas' actions were capable of founding liability.

The suggestion that Ms Ferguson knew the threats were unjustified was found to be absurd: victims of harassment invariably know that threats are unjustified - that is what the Act protects against. By arguing that computer-generated correspondence should not be taken seriously British Gas missed the point that real people are responsible for inputting data. Such threats were read by a real person and not a computer. Real people suffer real anxiety and distress and could not know if the threats were to be carried out or not.

British Gas' second argument was that while an individual trader may be liable, it, as a large corporation could not. It said there had to be a directing mind: knowledge by someone with seniority regarded as the mind of the company or an employee making British Gas vicariously liable. The court found that case law relied on by British Gas was only referable to the provisions of another act which allowed for a defence if shown that precautions were taken to avoid commission of the offence. The court's own research led it to the provisional view that the question of whether the acts of servants would be attributed to a company or not depended on the provisions of any particular act. Here, there was no distinction between a defendant and those under its control or a defence of accidental harassment. It was a question of whether British Gas knew or ought to have known the acts amounted to harassment.

Taking responsibility

There was no policy reason why large corporations should escape liability. If there was, it would mean that incorporation not only provided protection from personal liability for debts but also from legal liabilities which an individual could not evade. Accordingly Ms Ferguson had pleaded enough to allege knowledge by British Gas because a company must be taken to have knowledge of material known to employees even if senior management knew nothing of the particular case. As Ms Ferguson identified communication between her and British Gas, this raised an arguable case, and the onus was on British Gas to explain its state of knowledge. Even if actual knowledge could not be proved then an 'ought to know' case would suffice because the Act refers to whether a reasonable person would have thought the conduct amounted to harassment based on the communications passing. Reasoning, excuses or explanations for the conduct would not be considered. Indeed the court found the only real issue was whether the conduct amounted to harassment or not.

While the issues remain to be tested at trial the court appeared unimpressed by British Gas' arguments that it had done nothing wrong, noting it was deplorable that British Gas had sought to strike out the claim with untried explanations and excuses for its conduct. Harassment claims are usually thought to relate to stalker complaints or employment claims. This decision reiterates that limited companies, or as it was put 'large corporations', can also be liable and indeed for the correspondence they send. The publicity generated by this decision may well result in a rise in claims '“ although Ms Ferguson's aims were to encourage British Gas to take responsibility and not blame technology. Computerised debt collection systems can create erroneous letters, so caution should now be exercised and remedial action taken immediately. It only requires conduct on two occasions to give rise to liability under the Act. The floodgates may not have been opened but such claims are likely to be seen more and more by those who feel that they have been wronged by large consumer-facing entities such as British Gas.