Category Archives: damages

Bank-bashing by the Court of Appeal

The conduct was…intimidatory and controlling…If that amounts to good banking practice, that is a very sorry misassessment by the banks of what commercial morality and indeed legality requires

The Court of Appeal has held that the Bank of Scotland is liable for harassment in making hundreds of calls to  someone who exceeded her overdaft limit.

With the Information Commissioner taking recent robust action we all know that the making of unwanted calls by commercial organisations can be a breach of The Privacy and Electronic Communications (EC Directive) Regulations 2003 and the Data Protection Act 1998.

However, a recent Court of Appeal judgment has held that this practice can also constitute harassment, even when the calls are made by one’s own bank, in pursuit of a debt.

In Roberts v Bank of Scotland the claimant – a valiant litigant in person – had sought and was awarded damages in the County Court in the sum of £7500, under section 3 of the Protection from Harassment Act 1997. The Bank appealed, both on liability and quantum, and I suspect they wish they hadn’t.

The claim was made after the Bank made 547 calls in little more than a year, arising from minor instances of exceeding overdraft limits. Ms Roberts did not want to speak to call centre operatives, and had apparently sought unsuccessfully to speak to her local branch manager. Many of the calls were intimidatory, albeit couched in polite language. Despite Ms Roberts repeatedly asking for them to cease, she was told the calls would continue.

The Appeal Court had no hesitation in dismissing the Bank’s appeal, and did so in extraordinarily disapproving terms.

This was, undoubtedly, a course of conduct which amounted to harassment and which the bank knew or ought to have known amounted to harassment:

…the bank’s conduct in the present case easily crosses the threshold. It was harassment which could have been prosecuted in the criminal courts. In the event, and fortunately for the bank, this matter simply comes before the civil courts as a claim for damages [¶45]… The bank must have been perfectly well aware of the phone calls which it was making [¶47]

and the Bank could not fall back on the fact that it was pursuing a debt – there were other ways to do this, given that Ms Roberts had repeatedly asked for calls to cease. Although initially “it made perfectly good sense for the bank to write to the claimant and also to telephone her” this did not mean that all future calls were legitimised

The existence of a debt…does not give the creditor the right to bombard the debtor with endless and repeated telephone calls. The debtor is fully entitled to say that he does not wish to talk to the creditor. In those circumstances, the creditor is thrown back upon his full legal remedies. That is what the courts are there to provide…the claimant made it abundantly plain that she did not wish to receive telephone calls from the bank. She was perfectly entitled to adopt this position. Once the bank had tried to telephone the claimant a few times and had received the same response on each occasion, it was obvious that telephoning the claimant would achieve nothing. Thereafter, there was no possible justification for continuing to ring the claimant up [¶32-33]

All three judges were clearly very unsympathetic to the Bank’s arguments. A selection of their asides:

If [counsel for the Bank] is right in saying that the only practicable means by which a bank can contact defaulting customers is the method adopted in this case, then banks had better build into their costings the damages which from time to time they will be called upon to pay to those customers.[¶50]

The conduct was, as the judge said, intimidatory and controlling. In short, it was, in my judgment, obviously unlawful harassment. If that amounts to good banking practice, that is a very sorry misassessment by the banks of what commercial morality and indeed legality requires [¶62]

The bank should respect the rule of law and therefore it should, in the light of the judgments of this court, revise its systems and desist from any tortious conduct, and not simply factor into its working and operating costs the fact that from time to time the bank will have to pay damages for harassment [¶65]

That last comment, and indeed the judgment as a whole,  is pretty ominous for any organisation seeking to pursue and persuade debtors by a process of repeated phone calls (for which, now read “potential harassment”) when the recipient has asked them to desist. Lord Justice Jackson suspects his comments might be greeted with “derision in the boardrooms of the banks”: I suspect they may be also be greeted with consternation, and concern about the future of an element of banking practice which has effectively gone on unchecked for years. They would hardly have brought this appeal, over for what is for them a minute sum of money, unless they thought the case had wider implications which threatened their business practices.

They now will need to lick their wounds, and reconsider their approach to commercial morality and legality.

postscript

From this post on the excellent choptheknot blog it appears that similar principles were followed in another case involving the Bank of Scotland: Johnson v Bank of Scotland plc [2013] All ER (D) 193

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Filed under damages, Data Protection, harassment, nuisance calls, PECR, Privacy

Damages under s13 Data Protection Act – an Opportunity Lost?

A concession of an issue by the defendant in Halliday v Creation Consumer Finance means the law is still unclear as to whether nominal damages trigger compensation for distress arising from a contravention of the Data Protection Act

Section 13(1) of the Data Protection Act (DPA) provides a right to compensation for a data subject who has suffered damage by reason of any contravention by a data controller of any of the requirements of the Act.  The domestic authorities are clear that “damage” in this sense consists of pecuniary loss. Thus, section 13(1) is a “gateway” to a further right of compensation under section 13(2)(a), for distress. The right to distress compensation cannot be triggered unless section 13(1) damage has been suffered.

This point was addressed in Johnson v The Medical Defence Union Ltd (2) [2006] EWHC 321 and  on appeal (Johnson v Medical Defence Union [2007] EWCA Civ 262), with Buxton LJ in the latter saying

section 13 distress damages are only available if damage in the sense of pecuniary loss has been suffered

In the case at first instance  the judge had found against Mr Johnson in his claim that a failure to renew his membership was caused by unfair processing of his personal data. However, if the first head of claim had succeeded, pecuniary damages in the sum of £10.50, to cover the cost of a breakfast (don’t ask) would have been owed, and

the price of that breakfast [would have represented] his gateway to a right to recover compensation for distress under section 13(2)(a)

This point, already largely hypothetical, fell away on appeal, because the Court held 

The Judge was not entitled to find that this, the only item of pecuniary damage that survived, was attributable to damage for which the MDU was responsible

The judgment in a recent case, Halliday v Creation Consumer Finance Ltd (CCF) [2013] EWCA Civ 333 had been anticipated as possibly clarifying whether nominal, as opposed to substantial, damages under section 13(1), could suffice to be a gateway to distress compensation, and, indeed, whether the DPA effectively transposes the requirements of the European Data Protection Directive to which it gives effect. The case concerned errors by the defendant regarding disputed payments, which affected the claimant’s credit record. As Robin Hopkins said in a recent post on the Panopticon blog, after reports of the ex tempore judgment surfaced,

In Halliday…nominal damages (of £1) were awarded, thereby apparently fulfilling the ‘damage’ requirement and opening the door for a ‘distress’ award (though note that Panopticon has not yet seen a full judgment from the Court of Appeal in this case, so do not take this as a definitive account). If that approach becomes standard practice, claimants may be in much stronger positions for seeking damages.

Now that the full judgment has been made available, it can be seen that Mr Halliday did indeed succeed in using the nominal £1 damages as a gateway to £750 compensation for distress, but only because the defendant conceded the point:

this issue, which was the main issue of the proposed appeal to this court, is now academic as the respondent, CCF, concedes an award of nominal damages is “damage” for the purposes of the Directive and for the purposes of section 13(2) of the Data Protection Act 1998

So it appears we must continue to wait for fuller consideration of the meaning of the word “damage” in both the Directive and section 13 DPA.

UPDATE: Robin Hopkins has blogged on this case at the Panopticon blog. As he says – and as I may have omitted – “the judgment is not without its notable points”.

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Filed under damages, Data Protection