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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Ferguson v British Gas Trading Ltd [2009] EWCA Civ 46 (10 February 2009)
URL: http://www.bailii.org/ew/cases/EWCA/Civ/2009/46.html
Cite as: [2009] 3 All ER 304, [2010] 1 WLR 785, [2010] WLR 785, [2009] EWCA Civ 46

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Neutral Citation Number: [2009] EWCA Civ 46
Case No: A2/2008/1731

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
HIS HONOUR JUDGE SEYMOUR QC
(SITTING AS A JUDGE OF THE HIGH COURT)
HQ08X01805

Royal Courts of Justice
Strand, London, WC2A 2LL
10/02/2009

B e f o r e :

THE RT HON LORD JUSTICE SEDLEY
THE RT HON LORD JUSTICE JACOB
and
THE RT HON LORD JUSTICE LLOYD

____________________

Between:
Lisa Maria Angela Ferguson
Claimant/
Respondent
- and -

British Gas Trading Ltd
Defendant/
Appellant

____________________

(Transcript of the Handed Down Judgment of
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____________________

Martin Porter QC (instructed by Messrs Davis & Co) for the Appellant
James Purnell (instructed by Messrs Shepherd & Wedderburn) for the Respondent
Hearing date: 21 January 2009

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    Lord Justice Jacob:

  1. It is one of the glories of this country that every now and then one of its citizens is prepared to take a stand against the big battalions of government or industry. Such a person is Lisa Ferguson, the claimant in this case. Because she funds the claim out of her personal resources, she does so at considerable risk: were she ultimately to lose she would probably have to pay British Gas's considerable costs. I call the defendant "British Gas", its full name being "British Gas Trading Limited."
  2. Ms Ferguson used to be a customer of British Gas. She says she ceased to be so on 25th May 2006, on the same day becoming a customer of nPower. In her Particulars of Claim she sets out what she says British Gas did to her thereafter. Because the detail is lengthy I set out the relevant part of the Particulars in full in the Annex to this judgment rather than burden the reader with it here.
  3. To summarise, starting on 21st August 2006 and continuing until at least late January the next year, British Gas sent Ms Ferguson bill after bill and threatening letter after threatening letter. Nothing she could do would stop it. The threats were threefold in nature: those to cut off her gas supply, to start legal proceedings and, a matter most important to her as a businesswoman, to report her to credit rating agencies. She wrote letter after letter pointing out that she had no account with British Gas, she made phone calls (with all the difficulty of getting through), but to no avail. Mainly her letters received no response. Sometimes she received apologies and assurances that the matter would be dealt with. But then the bills and threats continued. She complained to Energy Watch. She wrote to the Chairman of British Gas twice with no response. She says she wasted many hours, and, more importantly, was brought to a state of considerable anxiety, not knowing whether the gas man would come at any time to cut her off, whether she would have legal proceedings served upon her or whether she would be or had already been reported to a credit rating agency. Even when her solicitor wrote on her behalf about an unjustified bill of 18th January, no response was received.
  4. Ms Ferguson claims that British Gas's course of conduct amounts to unlawful harassment contrary to the Protection from Harassment Act 1997. She claims £5,000 for distress and anxiety and £5,000 for financial loss due to time lost and expenses in dealing with British Gas. She is open about her reason for bringing these proceedings. It is mainly not to claim damages for herself - she says she will give a substantial proportion of any sum awarded to charity. Ms Ferguson's principal object is to bring British Gas to book. In her words they should "not simply blame information technology. They should instead start taking responsibility for the running of their company in a competent, honest and ethical manner."
  5. British Gas says it has done nothing wrong; that it is perfectly all right for it to treat consumers in this way, at least if it is all just done by computer. It goes so far as to say that the claim is so weak that Ms Ferguson's Particulars of Claim disclose no reasonable ground for bringing it. So the claim should be struck out and not even allowed to go to trial.
  6. I note in passing that, having set out on a strike-out course, quite wrongly British Gas put in evidence consisting of two witness statements to support its application, the sort of material that might be adduced in evidence at trial. This of coursed added unnecessarily to the legal costs. Mr. Martin Porter QC for British Gas properly did not seek to rely upon this evidence. Nor, seemingly, was any attempt made to rely upon it below. But of course Ms Ferguson's legal team could not realistically completely ignore this material. That will have cost her money and increased the pressure upon her. It is an unattractive aspect of this case which fortunately no longer matters since by our decision (communicated at the end of the hearing) and the decision below, British Gas has been ordered to pay her costs both of the hearing below and here. These are not insubstantial, though they are less than those of British Gas, whose claim for costs in this Court alone (if they had won) amounted to £20,368.75. Below, British Gas was ordered to pay £10,575.
  7. As I have said, British Gas applied to strike out the claim. The case was transferred from Bromley County Court to the High Court for this application to be considered, presumably because the parties considered that a question of some importance was at stake. The strike-out application was heard and decided by HHJ Seymour QC sitting as a Deputy High Court Judge. He refused to strike out the claim, refused permission to appeal and transferred the case back to the County Court.
  8. British Gas sought and obtained from Hughes LJ permission to appeal to this Court. Hughes LJ granted permission saying "however lamentable and frustrating the conduct of the Defendants, it is arguable that taken at its highest, it does not pass the criminal threshold."
  9. Before us Mr Porter takes that point (which he called the "gravity test"). He takes a further, more technical point, about whether, given the fact that the defendant is a company, it can be liable on the matter pleaded (the "corporate liability point").
  10. The Legislation

  11. The relevant language of the Protection from Harassment Act reads as follows:
  12. Prohibition of harassment.
    1(1) A person must not pursue a course of conduct—
    (a) which amounts to harassment of another, and
    (b) which he knows or ought to know amounts to harassment of the other.
    (2) For the purposes of this section, the person whose course of conduct is in question ought to know that it amounts to harassment of another if a reasonable person in possession of the same information would think the course of conduct amounted to harassment of the other.
    Offence of harassment.
    2(1) A person who pursues a course of conduct in breach of section 1 is guilty of an offence.
    (2) A person guilty of an offence under this section is liable on summary conviction to imprisonment for a term not exceeding six months, or a fine not exceeding level 5 on the standard scale, or both.
    Civil remedy.
    3(1) An actual or apprehended breach of section 1 may be the subject of a claim in civil proceedings by the person who is or may be the victim of the course of conduct in question.
    (2) On such a claim, damages may be awarded for (among other things) any anxiety caused by the harassment and any financial loss resulting from the harassment.
    Interpretation of this group of sections
    7(1) This section applies for the interpretation of sections 1 to 5A
    (2) References to harassing a person included alarming the person or causing the person distress

    The Gravity test

  13. Mr Porter accepted that what British Gas did to Ms Ferguson amounted to "a course of conduct." But, he submitted, it was not enough even arguably to amount to "harassment". No reasonable court could so conclude and hence the claim was without reasonable foundation.
  14. He pointed out that harassment is both a civil wrong (s.3(1)) and a crime (s.2(1)). That showed, he said, that the impugned conduct had to be rather serious. For otherwise merely annoying or aggravating matters of everyday life would be criminalised, which cannot have been the intention of Parliament.
  15. In support of his contention he took us to Majrowski v Guys and St. Thomas's NHS Trust [2007] AC 224 and Sunderland v Conn [2008] EWCA Civ.148.
  16. The actual point at issue in Majrowski was whether an employer could be vicariously liable for harassment by acts of its employee. The House of Lords held that it could. However in the course of his reasoning Lord Nicholls observed at [30]:
  17. Courts are well able to separate the wheat from the chaff at an early stage of the proceedings. They should be astute to do so. In most cases courts should have little difficulty in applying the "close connection" test. Where the claim meets that requirement, and the quality of the conduct said to constitute harassment is being examined, courts will have in mind that irritations, annoyances, even a measure of upset, arise at times in everybody's day-to-day dealings with other people. Courts are well able to recognise the boundary between conduct which is unattractive, even unreasonable, and conduct which is oppressive and unacceptable. To cross the boundary from the regrettable to the unacceptable the gravity of the misconduct must be of an order which would sustain criminal liability under section 2.

    And Baroness Hale said at [66]:

    All sorts of conduct may amount to harassment. It includes alarming a person or causing her distress: section 7(2). But conduct might be harassment even if no alarm or distress were in fact caused. A great deal is left to the wisdom of the courts to draw sensible lines between the ordinary banter and badinage of life and genuinely offensive and unacceptable behaviour.
  18. The passages were taken up by this Court in Sunderland, which, like Majrowski, was concerned with alleged harassment of one employee of the defendant by another such employee – a workplace context quite absent from this case. In Sunderland two workplace rows between an employee and his superior were proved. Although they amounted to a "course of conduct" this Court held there was no "harassment" because they were not sufficiently grave. Gage LJ said:
  19. [11] As Baroness Hale put it in her speech, harassment is left deliberately wide. Section 7, to which I have referred, points to elements which are included in harassment, namely alarming or causing distress. Speech is also included as conduct which is capable of constituting harassment. The definition of "course of conduct" means that there must be at least two such incidents of harassment to satisfy the requirements of a course of conduct. It is also in my judgment important to note that a civil claim is only available as a remedy for conduct which amounts to a breach of section 1, and so by section 2 constitutes a criminal offence. The mental element in the offence is conduct which the alleged offender knows, or ought to know, judging by the standards of what the reasonable person would think, amounts to harassment of another.
    [12] It seems to me that what, in the words of Lord Nicholls in Majrowski, crosses the boundary between unattractive and even unreasonable conduct and conduct which is oppressive and unacceptable, may well depend on the context in which the conduct occurs. What might not be harassment on the factory floor or in the barrack room might well be harassment in the hospital ward and vice versa. In my judgment the touchstone for recognizing what is not harassment for the purposes of sections 1 and 3 will be whether the conduct is of such gravity as to justify the sanctions of the criminal law.

    Buxton LJ said at [16]:

    More fundamentally, however, as my Lord has pointed out, there is no indication at this part of the judgment, and no (I have to say) reason to infer from the terms of the recorder's decision, that he had in mind the guidance given by Lord Nicholls in Majrowski as to the type of conduct that crosses the line into harassment. Crucial to that is Lord Nicholls' determination my Lord has referred to that the conduct concerned must be of an order that would sustain criminal liability, and not merely civil liability on some other register. Had the recorder had that requirement in mind when he came to this part of his judgment, it seems to me I have to say completely impossible that he would have concluded that the third incident, as it has been called, the first one relied on, could amount to harassment. But what occurred is a very long way away from anything that, in a sensible criminal regime, would lead to a prosecution, much less to a conviction

    Ward LJ was to similar effect.

  20. On the other hand in Allen v Southwark [2008] EWCA Civ 1478 this Court refused to strike out a claim for harassment by a tenant who (in the circumstances set out in the judgment) had been the victim of a number of wrongly issued possession proceedings. In giving the leading judgment Longmore LJ fastened upon the phrase "oppressive and unacceptable" used by Lord Nicholls in Majrowski.
  21. I accept that a course of conduct must be grave before the offence or tort of harassment is proved. And that, as Mr Porter accepted after some discussion, the only real difference between the crime of s.2 and the tort of s.3 is standard of proof. To prove the civil wrong of harassment it is necessary to prove the case on a balance of probabilities, to prove the crime, the standard is the usual criminal one of beyond a reasonable doubt.
  22. In so accepting I would just add this word of caution: the fact of parallel criminal and civil liability is not generally, outside the particular context of harassment, of significance in considering civil liability. There are a number of other civil wrongs which are also crimes. Perhaps most common would be breaches of the Trade Descriptions Act 1968 as amended. In the field of intellectual property both trade mark and copyright infringement, and the common law tort of passing off (which generally involves deception), may all amount to crimes. It has never been suggested generally that the scope of a civil wrong is restricted because it is also a crime. What makes the wrong of harassment different and special is because, as Lord Nicholls and Lady Hale recognised, in life one has to put up with a certain amount of annoyance: things have got to be fairly severe before the law, civil or criminal, will intervene.
  23. Having accepted Mr Porter's submission about the legal test requiring gravity, I apply it here. I am quite unable to conclude that the impugned conduct is incapable of satisfying the test. On the contrary I think, at the very least, that it is strongly arguable that it does. I ask myself whether a jury or bench of magistrates could reasonably conclude that the persistent and continued conduct here pleaded was on the wrong side of the line, as amounting to "oppressive and unacceptable conduct". I am bound to say that I think they could. And, in contrast to the Sunderland case, for instance, I would think it entirely proper for a prosecutor such as a Trading Standards Officer, to bring criminal proceedings in respect of a case where there has been such a period of persistent conduct and such threats as are pleaded here.
  24. What British Gas was threatening was undoubtedly serious. Mr Porter sought to downgrade it by saying that Ms Ferguson knew the claims and threats were unjustified. That is absurd: a victim of harassment will almost always know that it is unjustified. The Act is there to protect people against unjustified harassment. Indeed if the impugned conduct is justified it is unlikely to amount to harassment at all.
  25. Mr Porter also made the point that the correspondence was computer generated and so, for some reason which I do not really follow, Ms Ferguson should not have taken it as seriously as if it had come from an individual. But real people are responsible for programming and entering material into the computer. It is British Gas's system which, at the very least, allowed the impugned conduct to happen.
  26. Moreover the threats and demands were to be read by a real person, not by a computer. A real person is likely to suffer real anxiety and distress if threatened in the way which Ms Ferguson was. And a real person is unlikely to take comfort from knowing that the claims and threats are unjustified or that they were sent by a computer system: that will not necessarily allay the fear that the threats will not be carried out. How is a consumer such as Ms Ferguson to know whether or not, for instance, a threat such as "we will tell a credit reference agency in the next 10 days that you have not paid" (letter of 2nd January) will not be carried out by the same computer system which sent the unjustified letter and all its predecessor bills and threats? After all no amount of writing and telephoning had stopped the system so far – at times it must have seemed like a monster machine out of control moving relentlessly forward – a million miles from the "world class level of service" (letter of 9th January) which British Gas says it aims to offer.
  27. So I would reject Mr Porter's gravity point. It must go to trial.
  28. The corporate liability point

  29. Mr Porter submits that even if the alleged conduct as a whole, if carried out by one sentient being such as an individual trader, would amount to "harassment" it is not enough to prove a case against a large corporation. For that, he submitted, the claimant must prove more. She must plead either that the course of conduct was directed by someone with such seniority in the company (e.g. a director) that that person's mind is regarded as the mind of the company itself (a so-called "directing mind"), or that the course of conduct was the responsibility of an individual employee for whose acts the company is vicariously liable. Neither of these, he submitted, was pleaded here, so the claim was bound to fail.
  30. He founded his submission on a single authority, Tesco v Nattrass [1972] AC 153. Tesco had set up a proper system to prevent offences under the Trade Descriptions Act 1968. But a store manager failed to check his staff who had put up a "special offer" poster for goods which were being sold at a normal price, contrary to the provisions of the Act. The prosecution of Tesco failed. Mr Porter took us to what was said by Lord Morris at p.179:
  31. How, then, does a company act? When is some act the act of the company as opposed to the act of a servant or agent of the company (for which, if done within the scope of employment, the company will be civilly answerable)? In Lennard's Carrying Co. Ltd. v. Asiatic Petroleum Co. Ltd.  [1915] A.C. 705 Viscount Haldane L.C. said, at p. 713:
    "My Lords, a corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who for some purposes may be called an agent, but who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation. That person may be under the direction of the shareholders in general meeting; that person may be the board of directors itself, or it may be, and in some companies it is so, that that person has an authority co-ordinate with the board of directors given to him under the articles of association, and is appointed by the general meeting of the company, and can only be removed by the general meeting of the company."
  32. This showed, he said, that there is a general rule: in all cases there has to be directing mind or an identifiable employee for whom the company is vicariously liable. That rule is, he submitted, applicable here.
  33. But Tesco v Nattrass, as also Lennard's to which Lord Morris referred, turned on the provisions of the particular Act with which each case was concerned. In Lennard's the question was whether a ship-owner company was liable for loss of a cargo destroyed by a fire caused by the defective boilers of the owner's ship which was accordingly unseaworthy. There would be liability unless s.502 of the Merchant Shipping Act 1894 applied. For that it was necessary to show that the loss happened "without his actual fault or privity." The individual entrusted with the management of the ship knew or had the means of knowledge of the defects, but took no steps about them and allowed the ship to go to sea. The House of Lords held the defence failed because the individual concerned should be regarded as the directing mind of the company.
  34. It is noteworthy that the House took the view that it was for the company to prove the defence and that its failure to call the individual to explain what had happened was fatal. In this case one is unable to say whether British Gas would be in a position to escape liability on a "directing mind" basis since we have no evidence about it. One simply does not know whether what happened to Ms Ferguson is an extraordinary one-off case, or whether there are so many similar cases that senior management must know about it but are prepared to tolerate the position because it brings in the money. And even if liability can be avoided on that basis, there is the real potential for liability on the "ought to know" basis – see below.
  35. Tesco v Nattrass turned on the particular provisions of the 1968 Act. The question before the House was whether Tesco could rely upon s.24(1). This provided a defence for a person charged to prove (a) that the commission of the offence was due to … the act or default of another person .. and (b) that he took all reasonable precautions and exercised all due diligence to avoid the commission of such an offence. S.24(1)(b) was satisfied because Tesco had set up reasonable precautions, so the question was whether the store manager was "another person" within the meaning of s.24(1)(b). It was held he was.
  36. Even when Tesco v Nattrass was cited in argument before us, it seemed a long way from this case. The provisions of the Trade Descriptions Act and the Protection from Harassment Act are quite, quite different. But there is more. We were conscious at the time that perhaps we had not had as full a citation of authority about corporate liability as might be appropriate. So we asked one of our judicial assistants to look into the matter. She found a host of further, post-Tesco v Nattrass material indicating quite strongly that it was a case confined to the language of the particular statute being considered.
  37. I do not think it right, on an incompletely argued strike-out application, to analyse all this material in detail. Nor to come to anything other than a provisional conclusion about the question of corporate liability under the Act. What I will do is to identify all the material identified for us, consider what at present seem to be the two most material cases, and then say what my provisional view as to the meaning of this Act is.
  38. The material identified is Essendon Engineering v Maile [1982] Crim. L.R. 510; Group Newspapers v SOGAT [1987] I.C.R. 181; Tesco v Brent [1993] 1 W.L.R. 1037; Re Supply of Ready Mixed Concrete (No.2) [1995] 1 A.C. 456; Meridian Global Funds Management Asia v Securities Commission [1995] 2 AC 500; Re British Steel [1995] 1 W.L.R. 1356; and Cambridgeshire CC v Kama [2006] EWHC 3148.
  39. In Meridian, Lord Hoffmann said this at p.507:
  40. The fact that the rule of attribution is a matter of interpretation or construction of the relevant substantive rule is shown by the contrast between two decisions of the House of Lords,  Tesco Supermarkets Ltd. v. Nattrass  and  In re Supply of Ready Mixed Concrete (No. 2).

    He went on to describe each of these cases and a number of others. At p.511 he said:

    The question is one of construction rather than metaphysics

    And:

    But their Lordships would wish to guard themselves against being understood to mean that whenever a servant of a company has authority to do an act on its behalf, knowledge of that act will for all purposes be attributed to the company. It is a question of construction in each case as to whether the particular rule requires that the knowledge that an act has been done, or the state of mind with which it was done, should be attributed to the company. Sometimes, as in  In re Supply of Ready Mixed Concrete (No. 2)  [1995] 1 A.C. 456 and this case, it will be appropriate. Likewise in a case in which a company was required to make a return for revenue purposes and the statute made it an offence to make a false return with intent to deceive, the Divisional Court held that the mens rea of the servant authorised to discharge the duty to make the return should be attributed to the company: see  Moore v. I. Bresler Ltd.  [1944] 2 All E.R. 515. On the other hand, the fact that a company's employee is authorised to drive a lorry does not in itself lead to the conclusion that if he kills someone by reckless driving, the company will be guilty of manslaughter. There is no inconsistency. Each is an example of an attribution rule for a particular purpose, tailored as it always must be to the terms and policies of the substantive rule.
  41. That makes it entirely clear that one cannot just jump from one Act to another and say the rule for one is the rule for the other.
  42. And even with legislation affecting the conduct of retail trade, the position differs depending on the particular provision in question. This appears from the second Tesco case, Tesco v Brent. Tesco sold a video marked "18" to a 14-year old, contrary to s.11 of the Video Recordings Act 1984. S.11(2) provided a defence that the accused "neither knew or had reasonable grounds to believe" that the person was under age. The Divisional Court rejected a defence based on the fact that Tesco as a company did not know anything about the age of the purchaser. It reasoned that Parliament would know that the management of a company could not know anything about the age of a particular purchaser, and so the relevant factor was the knowledge of the employee involved in the transaction. Tesco v Nattrass was distinguished for a variety of reasons. I do not spell them all out here save to note that one of them was the fact that the court was concerned with different Acts, different language and different policies.
  43. It is however worth picking up two short passages from the judgment of Staughton LJ. At p. 1042 he said:
  44. The language here draws no distinction between the defendant and those under his control. The content is concerned with knowledge and information, not due diligence.

    That is also true of the Protection from Harassment Act.

  45. The other passage is a single sentence at p. 1043:
  46. I cannot believe that Parliament intended the large company to be acquitted but the single-handed shopkeeper convicted.

    That also seems applicable to the Protection from Harassment Act. For here British Gas, upon the assumption that the course of conduct amounts to harassment, accept that a single trader guilty of the same conduct would be liable.

  47. Finally, therefore, I turn to what I conceive to be the critical question, namely the construction of this Act. These are my provisional views only. As I have said the corporate liability point was not fully argued. And besides this point would be better decided after all the facts are known.
  48. The key words are in s.1(1)(b):
  49. he knows or ought to know amounts to harassment of the other;

    And in s1(2):

    For the purposes of this section, the person whose course of conduct is in question ought to know that it amounts to harassment of another if a reasonable person in possession of the same information would think the course of conduct amounted to harassment of the other.
  50. It is to be noted that the Act does not provide any defence for "accidental" harassment. Nor does it contain anything like s.24 of the Trade Descriptions Act, considered in Tesco v Nattrass. And one cannot think of any policy reason why big corporations should be exonerated for conduct which, if carried out by an individual, would amount to harassment.
  51. So Ms Ferguson must show either that British Gas knew the conduct complained of amounted to harassment, or that it ought to have so known.
  52. So far as a case based on actual knowledge is concerned, that would require proof of knowledge of the conduct and that it amounted to harassment. I am inclined towards the view that Ms Ferguson has pleaded enough to allege knowledge of the conduct complained of. For as a matter of construction it seems a company must be taken to have knowledge of material within the knowledge of its employees, even if top management know nothing of the particular case. That is particularly so where, as here, the company may be liable vicariously, see Majrowski. But there may be difficulties on showing knowledge that the conduct amounted to harassment. That would in itself potentially depend on how frequently this sort of thing has been happening and how aware senior management was aware of it. If, as I hope is not the case, it was known to be happening regularly and it had been decided that it was nonetheless worth it, then I can envisage Ms Ferguson getting home on actual knowledge.
  53. At this stage of course we have no idea of what the state of British Gas's actual knowledge was. Mr Porter suggested that was not good enough, that it is incumbent on Ms Ferguson in her particulars of claim to identify an individual with actual knowledge. That seems to me to be mistaken. Who knew what within British Gas is peculiarly within its knowledge. All Ms Ferguson can do is to identify the communications passing between British Gas and herself. If they raise, as I think they do, an arguable case of conduct amounting to harassment, then I think the onus shifts to British Gas to explain its state of knowledge.
  54. But the case on actual knowledge probably does not matter. For she does not have to go as far as to prove actual knowledge. An "ought to know" case will suffice. s.1(2) governs what amounts to this. It brings into play that well-known character "the reasonable person". As at present it seems to me that all the Act requires of the victim is to identify the course of conduct and what passed between the victim and the alleged harasser. The court is then notionally to put knowledge of that and of any other relevant information into the mind of this reasonable person. The court then decides whether that person would consider that the course of conduct amounts to harassment. Mr Porter suggested that there might be what I would call a defence of incompetence or the right hand not knowing what the left hand was doing. I am doubtful as to this as a matter of construction of the statute. The "reasonable person" is given the "same information" which, as I say, seems to be of the entire course of conduct plus the victim's responses. It is the point of view of the victim in the light of these facts which the reasonable person is to consider. The perpetrator's private reasons or excuses or explanations for the conduct do not come into it.
  55. I say no more about the corporate defence. If I am right in my provisional view, there simply is not one on the "ought to know" case. The only question at trial will be whether the conduct amounted to "harassment".
  56. We informed the parties at the conclusion of the hearing that the appeal would be dismissed. These are my reasons for so doing.
  57. Lord Justice Lloyd:

  58. I agree with Jacob LJ that British Gas has failed to make out its primary case, that the conduct alleged is not capable of being regarded as of sufficient gravity to constitute harassment in breach of the 1997 Act. I also agree with him that the alternative ground is also not made out, namely that none of the acts alleged, or not enough of them, are to be attributed to British Gas, either directly or vicariously, so as to make it liable even if the course of conduct was sufficiently grave to amount to a breach of the Act.
  59. Like him, I consider that we should not decide what the test is for corporate responsibility under the 1997 Act, having had what we now know to be only incomplete citation of relevant decided cases. For my part it seems to me that this test is not likely to depend on the issue of actual or deemed knowledge, but on the policy issue, as a matter of the true interpretation of the Act, whether conduct carried out in the course of the business of a particular body is to be attributed, for the purposes of this Act, to that body as a whole regardless of whether any one individual within the organisation was doing it all, or knew of it all being done, and if so at what level in the organisation that person was operating.
  60. The comparison by reference to the hypothetical reasonable person which is required by section 1(2) involves deeming that person not only to be reasonable but also to be in possession of the same information as the person has who is responsible for the course of conduct. Thus, the hypothetical person is treated as knowing not only the acts that British Gas did which make up the course of conduct, but also that which Mrs Ferguson did in response, and the relevant factual context, so far as known to British Gas. This assumes that British Gas is the perpetrator of the course of conduct, directly or vicariously, but that is what is alleged by Ms Ferguson and, in agreement with Jacob LJ and for the reasons he gives, it seems to me that this is not a point on which the claim can be struck out. What the knowledge is that is to be attributed to the hypothetical reasonable person will depend on the view taken, on the facts and on the construction of the Act, as to who it is that was responsible for the course of conduct. The deeming process is dependent on the answer to the prior question; it has no relevance to the process of finding the answer to that question.
  61. Lord Justice Sedley:

  62. I agree that Judge Seymour QC was entirely right not to strike out this claim. Like Lord Justice Jacob, I think it deplorable that, both by evidence and by argument, British Gas sought below to bolster their contention that the claim on its face was incapable of succeeding with untried explanations or excuses for their conduct. It is therefore worth reiterating that the court on an application such as this is required to assume that the claimant will prove all that she has alleged and that this will be the totality of the evidence. It is only if some unrevealed but incontestable fact will render the case hopeless that evidence can be adduced in support of such an application. This apart (and nothing advanced by British Gas comes close to it), if the claim is capable of succeeding, it is at trial, if at all, that the explanations and excuses become relevant.
  63. One excuse which has formed part of British Gas's legal argument for striking out the claim, and which has been advanced as incontestable and decisive, is that a large corporation such as British Gas cannot be legally responsible for mistakes made either by its computerised debt recovery system or by the personnel responsible for programming and operating it. The short answer is that it can be, for reasons explained by Lord Justice Jacob. It would be remarkable if it could not: it would mean that the privilege of incorporation not only shielded its shareholders and directors from personal liability for its debts but protected the company itself from legal liabilities which a natural person cannot evade. That is not what legal personality means.
  64. Lord Justice Jacob has drawn attention to the fact that in order to bring this claim Ms Ferguson has had to put her own resources at risk. For my part I would draw attention to the fact – which has been prominent elsewhere in British Gas's argument – that harassment is a crime as well as a tort. Contrary to what was more than once suggested, this does not modify in any way the constituents of the wrong. All it means is that, on a prosecution, the identical elements must be proved not simply on the balance of probability but so that the court is sure. In any well-documented case, what is sufficient for the one purpose is likely to be sufficient for the other.
  65. Parliament's intention in passing the Protection from Harassment Act 1997 was to criminalise the kind of serious and persistent unwarranted threat which is alleged here, giving a right of civil action as a fallback. In this situation it ought not to be left to hardy individuals to put their savings and homes at risk by suing. The primary responsibility should rest upon local public authorities which possess the means and the statutory powers to bring alleged harassers, however impersonal and powerful, before the local justices.
  66. Annex: the full Particulars of Claim

    1. The Claimant, a self-employed property investor, had a domestic gas supply contract with the Defendant. She closed this account on 25 May 2006 and changed gas supplier to npower on that date.

  67. The Claimant received a letter from npower dated 16 August 2006, confirming that her gas supply had been transferred to npower on 25 May 2006.
  68. On receipt of the letter referred to in paragraph 2 above, the Claimant telephoned npower because she had not received a closing statement from the Defendant. Npower again confirmed that the data had been passed to the Defendant.
  69. The Claimant received a bill from the Defendant dated 21 August 2006 in the amount of £236.40 for the period 14 April 2006 to 14 July 2006.
  70. On receiving a reminder from the Defendant dated 11 September 2006 relating to the above bill, the Claimant made several unsuccessful attempts to speak to the Defendant by telephone. The Claimant then posted a copy of the reminder to the Defendant annotated in bold, stating that the bill was invalid as the account was closed. No response was received to that letter.
  71. On 29 September 2006 the Claimant telephoned npower, who confirmed that the transfer data had been passed to the Defendant on two occasions.
  72. The Claimant received a letter from the Defendant dated 25 September 2006, threatening gas disconnection. The Claimant wrote to the Defendant stating that the account was closed and enclosing a copy of the letter from npower referred to in paragraph 2 above.
  73. On 4 October 2006, the Claimant wrote to the gas and electricity watchdog Energywatch to advise them of the problems she was experiencing with the Defendant.
  74. The Claimant received a bill from the Defendant dated 29 September 2006 in the amount of £158.23 for the period 14 April 2006 to 23 May 2006 in respect of 170 units up to a reading of 0517. The Claimant paid this bill in full on 10 October 2006, believing it to be her closing bill as it covered the correct period up to the transfer of her supply from the Defendant to npower.
  75. The Claimant received a letter from the Defendant dated 19 October 2006, acknowledging receipt of £158.23 and stating that her account was paid in full. The Claimant believed that the problems with the Defendant had now been resolved. She had paid the Defendant in full for all services received prior to her transfer to npower.
  76. The Claimant then received a bill from the Defendant dated 20 November 2006 for the period 24 May 2006 to 13 October 2006 in the amount of £253.31. The Defendant sent a reminder on 11 December 2006 in respect of this bill.
  77. On 20 December 2006, the Claimant returned the bill referred to in paragraph 10 above to the Admail Customer Complaints Manager with a covering letter. No response was received.
  78. On 4 January 2007, the Claimant received a letter from the Defendant dated 25 December 2006, threatening the Claimant with gas disconnection and warning that her credit rating might be blacklisted.
  79. The Claimant then received a letter dated 2 January 2007 from the Defendant's Head of Debt stating that legal action was being arranged, that the gas supply at her property would be disconnected on or after 29 January 2007, that the Claimant's credit rating might be adversely affected, that the Defendant would notify a credit reference agency in the next 10 days if the Claimant had not paid the sums due, and that further legal action might be taken which could result in considerable legal costs and/or transfer of the debt to a debt collection agency.
  80. On 5 January 2007, in alarm and distress following receipt of the threatening letter dated 2 January 2007 the Claimant, after sending a fax to Energywatch stressing the urgency of her situation, contacted her solicitor for advice.
  81. On 9 January 2007 the Claimant wrote to the Defendant's Head of Debt, advising him that she had instructed her solicitor and requesting that all future correspondence be copied to her solicitor. No response was received.
  82. The Defendant sent a letter dated 5 January 2007 to the Claimant, confirming the transfer of supply on 25 May 2006 at a reading of 0517 and asking the Claimant to ignore the reminder dated 11 December 2006. There was no reference to the letter of 2 January.
  83. The Claimant received a letter of apology from the Defendant dated 9 January 2007 which stated that it was in response to her complaint to Energywatch. This letter confirmed that the Claimant's gas supply had left the Defendant on 25 May 2006 at a reading of 0517, that a bill which had been issued on 5 January had been cancelled and that the Claimant was to ignore this bill when it arrived. There was no reference to their letter of 2 January 2007.
  84. On 10 January 2007, the Claimant replied to the Defendant's letter of 9 January 2007 enclosing a copy of her letter to the Defendant's Head of Debt referred to in paragraph 16 above. No response was received.
  85. On 15 January 2007, the Claimant's solicitor wrote to the Defendant seeking an undertaking that they would cease chasing payment of wrongly issued bills, withdraw all threats of legal action against the Claimant and refrain from taking any steps to enter the Claimant's property. No response was received.
  86. On 17 January 2007 the Claimant received two bills dated 9 January 2007 from the Defendant, each in the amount of £0.28. One of these bills was marked "final bill". 179 units were billed up to a reading of 0517. This was the same closing reading shown on the bill dated 29 September 2006 up to the date of transfer of the Claimant's supply, which the Claimant had already paid.
  87. On 24 January 2007, the Claimant sent a fax to Energywatch enclosing recent correspondence with the Defendant including the Defendant's letter of 2 January 2007 referred to in paragraph 14 above and the bill dated 18 January 2007.
  88. On 25 January 2007, the Claimant's solicitor wrote to the Defendant asking them to rectify the errors in the bills referred to in paragraph 21 above. No reply was received.
  89. On 24 January 2007, the Claimant received a bill dated 18 January 2007 from the Defendant for the period 14 April to 13 October 2006 in the sum of £253.31. This bill has not been cancelled. This is the most recent written communication from the Defendant.
  90. On 30 January 2007 and 3 March 2007, the Claimant sent letters to the Defendant's Chairman by recorded delivery setting out details of her harassment by the Defendant and her intention to raise a claim against the Defendant. No reply has been received to either letter.


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URL: http://www.bailii.org/ew/cases/EWCA/Civ/2009/46.html