England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		16 December 2008

Mr Justice Eady :

1. On 1 December 2008, I handed down a reserved judgment in which I gave my reasons for striking out the libel aspect of these proceedings: [2008] EWHC 2927 (QB). I then heard an application on the Claimant's behalf to amend the pleaded case in order to add a further cause of action based on the same facts as are already pleaded; namely, the sending out of the letter to the Claimant's customers in July 2008 with a view to encouraging them to change to the Defendant's broadband service. I indicated at the conclusion of the hearing that I would grant permission to amend and that I would hand down my reasons in writing at a later date. That is the purpose of the present judgment.
2. The Claimant now seeks to rely upon interference with its business by unlawful means. The case is put in two ways. On the one hand, reliance is placed on the existing allegations of malicious falsehood, as providing the unlawful means, and on the other it is sought to introduce alleged breaches of the Consumer Protection from Unfair Trading Regulations (2008/1277) and the Business Protection from Misleading Marketing Regulations (2008/1276), both of 2008. These are, together, intended to implement the provisions of the Unfair Commercial Practices Directive (2005/29/EC) and the Misleading and Comparative Advertising Directive (2006/114/EC). Reliance is also placed on the Control of Misleading Advertisement Regulations 1988 (as amended). It is argued that the alleged infringement of these regulations, which does not require the establishment of dishonesty on the Defendant's part (unlike malicious falsehood), would provide an alternative route to establishing the necessary unlawful means.
3. I do not need to set out the lengthy amendments contained in paragraphs 8.4 to 8.6 of the proposed pleading. They can be summarised by saying that the Claimant relies upon the allegedly misleading effect on recipients of the letter of the false information to the effect that the Claimant's broadband service was, or was about to be, put in jeopardy by the prospect of a takeover.
4. The central point of the Claimant's case is that there simply were no grounds for suggesting that the talk earlier in the year of a takeover, or the possibility of its coming to fruition in the medium term, provided any grounds for thinking that the broadband service would no longer be available to customers. Nor does the letter actually say so; what it does is to sow the seeds of doubt – with a view to coaxing the Claimant's existing customers to come over to the Defendant's service as being more secure.
5. There is no reason to suppose that if the Claimant succeeds in establishing an infringement of these new regulations, aimed at the protection of consumers and businesses, this could not serve as "unlawful means" for the purpose of establishing that tort.
6. It is interesting to see that the relatively unfamiliar concepts of "honest market practice" and "the general principle of good faith", which are both relevant to the concept of "professional diligence" in Regulation 3(3) of the Consumer Protection Regulations, are construed in such a way that a breach may be found even in the absence of dishonesty as it is traditionally understood in domestic jurisprudence. That is why Mr Spearman QC, on the Claimant's behalf, observed at the earlier hearing that infringement of the regulations would be easier for his client to prove than the ingredients of the tort of injurious falsehood (which do include the need to establish dishonesty).
7. This broad interpretation is borne out by the remarks of Jacob LJ in Boehringer Ingelheim Ltd v Vetplus Ltd [2007] FSR 29 at [27]-[29]:

"27. … I think a man who makes a damaging statement involving use of another's mark which he reasonably believes to be true at the time but which later turns out to be untrue would not be acting in accordance with an honest practice if he were not prepared to compensate the owner of the damaged mark. He can express his honestly held opinion, but unless that is on the basis that he will compensate his trade rival if it is proved to be wrong, he is not acting in accordance with an honest practice and will be adjudged to infringe.

…

29. Indeed the Comparative Advertising Directive (97/55/EC) rather confirms the position. It is not in dispute that a comparative advertiser will be acting in accordance with 'honest practices' provided he does so in accordance with the conditions of Art 3a of the Misleading Advertising Directive (84/450/EC). One of those conditions is that the advertising must not be misleading. If an advertisement is in fact misleading, however honestly the advertiser believed what he said at the time, he would be outside the Directive."

8. It is a relatively new concept in English law that there is an "objective" test of dishonesty; that is to say, in this context it is not necessary to demonstrate that at the time the offending statement was made its maker knew it to be false or had no honest belief in its truth: see also Cable & Wireless Plc v British Telecommunications Plc [1998] FSR 383, 391, per Jacob J (as he then was).
9. The grounds of objection to these amendments are quite narrow. It is naturally disputed that the July letter contained any false statement. I cannot at this stage, however, conclude that there is no realistic prospect, or only a "fanciful" prospect, of establishing (a) that the letter conveyed the notions to reasonable recipients that there was a risk that the Claimant's broadband service would shortly cease to be available, or (b) that this was false and/or unsupported by evidence.
10. Secondly, it is argued that it would, even for the purpose of showing a breach of any of the regulations cited above, be necessary to show that relevant persons within the Defendant's organisation had actually been dishonest or indifferent to the truth of the letter's contents at the time of publication. Yet, as I have indicated, that does not appear to be sound in law: I shall, therefore, allow these novel amendments.
11. There was also before the court an application to augment the claim for special damages. Specifically, it is sought to plead reliance on a significant "spike" for the month of July showing a much larger departure of customers compared to the statistics available for other months. It is alleged that the statistics show that nearly 12,000 more customers than average left the Claimant in that month. The loss for each customer is estimated at the moment to be of the order of £306. There may be considerable difficulty and expense involved in bringing those consumers' decisions home to the Defendant's letter. But I cannot at this stage exclude such a claim and I give permission to add it.