Companies - Corporate liability - Course of conduct - Harassment

Lisa Maria Angela Ferguson v British Gas Trading Ltd: CA (Civ Div) (Lords Justice Sedley, Jacob, Lloyd): 10 February 2009

The appellant company (B) appealed against a decision refusing to strike out a claim brought against it by the respondent (F) for damages for unlawful harassment.

F used to be a customer of B’s, but when she switched to another company, B sent her several bills which she claimed were unjustified. She received letters threatening to cut off her gas supply, to start legal proceedings against her, and to report her to credit rating agencies. She contacted B several times by letter and by phone, but the bills and threats continued. F claimed that B’s course of conduct amounted to unlawful harassment contrary to the Protection from Harassment Act 1997. B argued that (1) the conduct in question was not enough to amount to harassment. Since harassment was both a civil wrong and a crime, the impugned conduct had to be rather serious; otherwise, merely annoying or aggravating matters of everyday life would be criminalised, which could not have been the intention of parliament. F knew the claims and threats were unjustified. She also knew that the correspondence was computer-generated, so it should not have been taken as seriously as if it had come from an individual; (2) 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 decision in Tesco Supermarkets Ltd v Nattrass [1972] AC 153 HL showed that a claimant had to plead either that the course of conduct was directed by someone with such seniority in the company that their mind was regarded as the mind of the company itself, or that the course of conduct was the responsibility of an individual employee for whose acts the company was vicariously liable. Since neither of those was pleaded by F, the claim was bound to fail.

Held: (1) A course of conduct must be grave before the offence or tort of harassment was proved, Majrowski v Guy’s and St Thomas’ NHS Trust [2006] UKHL 34, [2007] 1 AC 224, Conn v Sunderland City Council [2007] EWCA Civ 1492, [2008] IRLR 324 and Allen v Southwark LBC (2008) EWCA Civ 1478 considered. The only real difference between the crime under section 2 and the tort under section 3 of the 1997 act was standard of proof. The fact of parallel criminal and civil liability was not generally significant in considering civil liability. There were a number of civil wrongs which were also crimes: it had never been suggested generally that the scope of a civil wrong was restricted because it was also a crime. The wrong of harassment was different because one had to put up with a certain amount of annoyance in life. Therefore, things had to be fairly severe before the law, civil or criminal, would intervene. At the very least, it was strongly arguable that B’s conduct was capable of satisfying the test of gravity. The argument that F knew the claims were unjustified was absurd: the act was there to protect people against ­unjustified harassment. If the impugned conduct was justified it was unlikely to amount to harassment at all. Although the threats were sent by B’s computer system, they were to be read by a real person, not a computer. A real person would be likely to suffer real anxiety and distress if threatened in the way F was threatened.

(2) It was not appropriate, on an incompletely argued strike-out application, to analyse the authorities on corporate liability under the act in detail. It was notable that the act did not provide any defence for ‘accidental’ harassment. Nor did it contain anything like section 24 of the Trade Descriptions Act 1968, which was considered in Tesco. It was difficult to think of a policy reason why large corporations should be exonerated for conduct which, if carried out by an individual, would amount to harassment. The court’s provisional view was that F had pleaded enough to allege actual knowledge of the conduct complained of, Tesco considered. As a matter of construction, it seemed that a company must be taken to have knowledge of material within the knowledge of its employees, even if top management knew nothing of the particular case. However, there might be difficulties in showing knowledge that the conduct amounted to harassment. However, F did not have to go as far as to prove actual knowledge. An ‘ought to know’ case would suffice.

Appeal dismissed.

Martin Porter QC (instructed by Davis & Co) for the appellant; James Purnell (instructed by Shepherd & Wedderburn) for the respondent.