HM Govt has refused to follow the lead of many EU states and allow direct enforcement by businesses of the revolutionary Consumer Protection from Unfair Trading Regulations 2008. Now a High Court verdict threatens to change all that. Stephen Groom reports.
Who: BT and Tiscali
When: December 2008
Where: Queen's Bench Division of the High Court of Justice, London
Law stated as at: 22 December 2008
In a potentially historic verdict, Mr. Justice Eady of the Queen's Bench Division of the High Court allowed ISP Tiscali, currently carrying a "For Sale" sign, to add a new claim to its current litigation against BT.
The litigation was precipitated by a letter sent by BT to large number of Tiscali's customers in July 2008. The letter, subsequently described by the court as an "opportunistic commercial ploy", was trying to persuade them to switch to the BT Total Broadband service. It included the words "Tiscali chief plots sell-off" and went on:
"We can understand why you're wondering what might happen to your Tiscali broadband service. And because no-one really knows the answer yet, it could be a good time to look at an alternative Broadband service.
Changing your provider to BT could be the right move if you're worried about the future of your broadband service. Because BT Total Broadband is the UK's most complete and is here to stay.."
Tiscali sues for libel and malicious falsehood
Tiscali sued BT for libel and malicious falsehood, but on 1 December 2008 Eady J struck out the libel claim.
Tiscali had argued that BT's words carried the clear and defamatory meaning that Tiscali was acting without honesty or candour in the running of its business, but Eady J found this argument "fanciful" and held that it would be perverse for a jury to uphold this meaning. The Judge went on:
"it may well be that [BT] was stirring up concerns among [Tiscali's] customers unnecessarily, and without any justification, but it is a step too far to suggest that any reasonable person would construe them as saying that [Tiscali] was dishonest or in breach of some duty towards its customers."
Tiscali's innovative attempt to replace libel claim
Undaunted by this setback, Tiscali asked the court for permission to add a new claim to its suit. The claim was for the comparatively ancient tort of "interference with business by unlawful means."
The "unlawful means" was argued to be the sending of the letter, which, Tiscali argued, by reason of its allegedly misleading content constituted an unfair commercial practice and as such a criminal offence under the Consumer Protection from Unfair Trading Regulations 2008 ("CPRs").
BT opposed this but Mr. Justice Eady was prepared to at least allow Tiscali the opportunity to run with this argument in the litigation.
The Judge did not at this point see any reason to suppose that if Tiscali were successful in establishing an infringement of the CPRs, this could not serve as "unlawful means" for the purposes of establishing the tort of "interference with business by unlawful means."
So the case, now framed in malicious falsehood and interference with business by unlawful means, continues to the next round, which may well be an appeal by BT against this verdict.
Why this matters:
Marketinglaw has for long argued against the UK Government's refusal to countenance a private right of action by businesses or consumers against traders who breach the CPRs. We have pointed out that in taking this course, the UK is at marked variance with many and possibly most EU states.
Currently it is likely that 2009 will see a consultation on possible consumer rights of redress against traders who breach the CPRs, but direct enforcement rights for businesses still appear to be in the long grass.
It remains to be seen whether this case will survive any BT appeal and what looks to be the inevitable change of ownership of Tiscali (although at the time of writing talks with BSkyB seem to have stalled).
Marketinglaw selfishly hopes the litigation will continue: a green light for such claims would not only see a revival of an all but obsolete tort but the birth of a radical and potent weapon for businesses who feel they should have the right to take direct action against rivals who they see as trying to gain a competitive edge by illegitimate means.