How British Gas ended up in court for being too heavy-handed with customers

Joshua Rozenberg
25 Feb 2009

If businesses find themselves sued and even facing criminal charges for harassing their customers in the coming months, they will know which company to blame. British Gas has quietly settled the claim by a former customer that brought it so much bad publicity this month.

But the settlement - which neither side would discuss - came too late to stop two senior appeal judges calling on local trading standards officers to bring criminal proceedings against companies that treat their customers in the way alleged by Lisa Ferguson, 47, from Bromley.

"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," Lord Justice Jacob said in the Court of Appeal.

Although Ferguson had changed from British Gas to another supplier in May 2006, she received bill after bill, threatening letter after threatening letter, over the following eight months.

Ferguson, a self-employed property investor, accused British Gas of pursuing a course of conduct that amounted to harassment of her - and which the company should have known was harassment.

This is a criminal offence under the Protection from Harassment Act 1997. Victims may also claim damages in the civil courts for anxiety and financial loss, as she did.

The 1997 Act was designed to deal with the problem of stalking, especially by strangers. But whoever drafted it must have been unfamiliar with the law of unintended consequences. In 2006, the Law Lords confirmed the Act could be used by employees bullied at work, although the Court of Appeal restricted its use in bullying cases a year later.

Martin Porter QC, for British Gas, may have hoped to stop the 1997 Act spreading still further - this time to the supplier-customer relationship. If that was why his clients tried to have Ferguson's claim struck out ahead of a full hearing, their tactics backfired.

"I accept that a course of conduct must be grave before the offence or tort of harassment is proved," said Lord Justice Jacob this month. But it was "strongly arguable", at the very least, that Ferguson's allegations, if proved, would satisfy that test.

The judge also rejected the QC's claim that consumers should take computer-generated letters less seriously than those written individually. How was Ferguson to know that the computer would not have sent false information about her to a credit reference agency? If British Gas had persuaded the Court of Appeal to throw out Ferguson's claim at this preliminary stage, the company would have claimed legal costs from Ferguson of more than £20,000 - for a one-day hearing.

"It ought not to be left to hardy individuals to put their savings and homes at risk by suing," said Lord Justice Sedley. "The primary responsibility should rest on local public authorities - which possess the means and the statutory powers to bring alleged harassers, however impersonal and powerful, before the local justices."

Conduct bad enough to justify a civil claim would also suffice for a criminal prosecution, he explained, although a higher standard of proof was needed.

As a result of this precedent, consumers will now be pressing trading standards officers to bring prosecutions. The law firm Weightmans advised clients with automated billing systems to keep a close eye on their computers, ensuring that any errors or complaints were dealt with immediately.

British Gas has learned its lesson. "The error happened in 2006 at a time of significant system changes which adversely affected a very small number of British Gas customers," a spokesman said. "Since then the improvement in our customer service is well documented, with a 90% decrease in complaints."

Except, I suppose, from the first business to pick up a criminal record for harassment by computer as a result of this case.