UK: England and Wales: companies, harassment and attribution

Yesterday the Court of Appeal gave judgment in Ferguson v British Gas [2008] EWCA Civ 46. Jacob LJ began his judgment with the memorable line: "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" (para. [1]). This case is of interest because it concerned a company and the circumstances in which a company could be guilty of unlawful harassment contrary to the Protection from Harassment Act (1997). 

Ms Ferguson brought a claim against British Gas Trading Ltd. ("BG") for unlawful harassment contrary to Sections 1 and 2 of the 1997 Act. She ceased to be a customer of BG in May 2006 but between August 2006 and January 2007 was sent bills and letters threatening to cut off her gas supply, take court action and report her to credit reference agencies. Letters to the chairman of BG went unanswered and she spent many hours and suffered anxiety trying to resolve matters. She argued that BG's course of conduct represented unlawful harassment. British Gas argued that the claim should be struck out because it disclosed no reasonable grounds for bringing it. This is the question that the court had to determine; there was not, therefore, a full trial of the issues.

A unanimous court (Sedley, Jacob and Lloyd LJJ) refused to strike out the claim and rejected the argument put for BG that its actions were not of the gravity required successfully to establish unlawful harassment. The court held that there was a strongly arguable case that its actions did amount to unlawful harassment. 

The issue of corporate liability was raised by counsel for BG: with reference to Tesco v Nattrass [1972] AC 153 it was argued that the claim was bound to fail because Ms Ferguson had failed to plead that the course of conduct was either [a] directed by someone who would be regarded as the "directing mind" of the company or [b] the responsibility of an individual employee for whose acts the company would be vicariously liable. This argument was not subject to detailed discussion or analysis because there had been incomplete citation of relevant authorities. Nevertheless, Sedley LJ observed (para. [51]):

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 ... 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".

Note: issues of attribution have been considered recently by the Judicial Committee of the Privy Council in Lebon & Anor v. Aqua Salt Co Ltd (Mauritius) [2009] UKPC 2.