A Warning To Anyone Involved In Debt Recovery

In a troubled economic climate resulting in a boost in debt

recovery, the recent English case of Ferguson v British Gas Trading

Limited [2009] EWCA Civ 46 provides a warning to those involved in

debt collection.

Ms Ferguson was a customer of British Gas but switched to a

different supplier. However, British Gas sent her bills which were

either for sums she had already paid, or were for the period

following the termination of her contract with British Gas. Worse

still, British Gas wrote to advise that if she did not make

payment, they would cut off her gas supply, start legal proceedings

and report her to credit rating agencies. Naturally, Ms Ferguson

complained to British Gas and advised them of their mistake.

However, despite her numerous letters and telephone calls, British

Gas continued to send her the bills and accompanying threats.

Ms Ferguson decided that enough was enough and raised an action

against British Gas for £10,000 on the basis that their

conduct amounted to unlawful harassment in contravention of the

Protection from Harassment Act 1997, having caused her stress,

anxiety and financial loss through lost time and expenses. British

Gas argued that its conduct was not serious enough to constitute

harassment under the 1997 Act. It contended that because the

letters were computer generated, they ought not to have been taken

as seriously as if they had come directly from an individual. In

the Court of Appeal Lord Justice Jacobs was not impressed with the

arguments that British Gas had put forward, advising that the

demands and threats from British Gas were indeed read by a real

person who was likely to suffer real anxiety and distress.

British Gas had also argued that even if its conduct was held to

be harassment in terms of the 1997 Act, it could not be guilty of

it as a large corporation. The onus was, therefore, on Ms Ferguson

to demonstrate that British Gas knew, or ought to have known, that

the conduct amounted to harassment. Lord Justice Jacobs thought

that at the very least, British Gas ought to have known and simply

could not rely upon a "defence of incompetence".

The case was remitted to trial to decide if the conduct of

British Gas fell within the parameters of harassment in terms of

the 1997 Act but was subsequently settled out of court.

Whilst this case is an extreme example, it has brought to light

valuable lessons for those involved in debt recovery:

Be well aware that if you pursue the wrong person or pursue a

person...