The spamming industry is a decidedly irritating but sadly almost unavoidable feature of our networked world. There is no question but that spamming (i.e. the sending of unsolicited direct marketing electronic communications) constitutes an unlawful invasion of our privacy (see further regs 22-23 of the Privacy and Electronic Communications Regulations 2003 (SI 2003/2426) (PECR), implemented under EU Directive 2002/21/EC). The question is what can be done to stop it, particularly given that individual citizens will typically not want to waste their time litigating over the odd spam email or text?
Well one way to address this problem would be to have an effective penalties regime in place, one that effectively kicked the spammers where it hurts by subjecting them to substantial financial penalties. No surprise then that, in 2009, the EU Directive which prohibits spamming was amended so as to require Member States to ensure that they had in place penalties regimes which were ‘effective proportionate and dissuasive’ (see Article 15a of the Directive). This provision in turn led to amendments to PECR which resulted in the monetary penalty regime provided for under s. 55A of the Data Protection Act 1998 being effectively incorporated into PECR. Readers of this blog will be aware of recent litigation over the application of s. 55A in the context of cases involving breaches of the DPA (see further the current leading case on this issue Central London Community Healthcare NHS Trust v Information Commissioner  1 Info LR 51, which you can read about here). But is the DPA monetary penalty regime really fit for purpose when it comes to dealing with spamming activities which are prohibited by PECR? If the recent decision by the Upper Tribunal in the case of Information Commissioner v Niebel is anything to go by, the answer to that question must be a resounding no.
The background to the Niebel case is as follows. Mr Niebel had sent out unsolicited text messages on an industrial scale. The texts sought out potential claimants in respect of misselling of PPI loans. The Information Commissioner, who had received hundreds of complaints about the texts, went on to issue Mr Niebel with a monetary penalty of £300,000. So far so unsurprising you might say. However, Mr Niebel has since managed to persuade the First-Tier Tribunal (FTT) to quash the penalty in its entirety (see its decision here) and now the Upper Tribunal (UT) has decided that the penalty should be left firmly quashed (see the UT’s decision here).
So how has Mr Niebel been able to avoid any penalty despite the patently unlawful nature of his activities? To answer that question one first has to understand the ostensibly high threshold which must be cleared if the power to impose a penalty is to be engaged. In short, the legislation only permits a penalty to be issued if there is ‘a serious contravention’ of the legislation (s. 55A(1)(a) and that contravention was ‘of a kind likely to cause substantial damage or substantial distress’ (s. 55A(1)(b) – there is also a knowledge requirement (s. 55A(1)(c)) however that requirement will typically be made out in the case of unlawful spammers). But can it really be said that the sending of relatively anodyne spam text message is ‘of a kind likely to cause recipients substantial damage or substantial distress’? Both the FTT and the UT have now firmly answered this question in the negative.
In the course of its decision, the UT considered the following arguments advanced by the Commissioner.
– First, when deciding whether the contravention was ‘of a kind’ likely to cause substantial damage or substantial distress, it was possible to take into account not only the scale of the particular texts in issue but also the scale of Mr Niebel’s overall spamming operation. This was an important argument in the context of the appeal because, whilst there was no doubt that over time Mr Niebel had sent out hundreds of thousands of unsolicited communications, the Commissioner had identified ‘the contravention’ as relating only to 286 text messages in respect of which he had received complaints. (He had accepted that some 125 other complaints could not be taken into account as they related to communications sent prior to the coming into force of the penalties regime). The issue was therefore whether the wider context could be taken into account when deciding whether the contravention was ‘of a kind’ likely to cause substantial damage or substantial distress.
– Second, the word ‘substantial’ in this context must be construed as meaning merely that the damage or distress was more than trivial. This is because the penalties regime was plainly intended to bite on unlawful spammers who caused low level damage or mere irritation, and such individuals would not be caught by the legislation if the word ‘substantial’ was construed as carrying any greater weight.
– Third, the FTT had otherwise erred when it concluded that the 286 texts in issue were not of a kind likely to cause substantial damage or substantial distress.
On the first argument, the UT accepted that the scale of the contravention could be taken into account when deciding whether it was of a kind likely to cause substantial damage or substantial distress. However, it rejected the argument that Mr Niebel’s wider spamming activities were relevant to the analysis. The UT concluded that activities these did not form part of the ‘contravention’ relied upon by the Commissioner and were not therefore relevant to the analysis when it came to deciding whether s. 55A was engaged (para. 38).
On the second argument, the UT accepted Mr Niebel’s argument that it was not appropriate to try and deconstruct the meaning of the word ‘substantial’ and that the FTT had not erred when it had concluded simply that the question whether the substantial element was made out was ‘ultimately a question of fact and degree’ (paras. 42-51).
On the third argument, the UT held that the FTT’s decision that the 286 texts in issue were not of a kind to cause substantial damage was ‘simply unassailable’. The FTT had been entitled to conclude that the mere fact that recipients might have felt obliged to send ‘STOP’ messages to Mr Niebel did not amount to ‘substantial damage’ (para. 54). On the question of substantial distress, the FTT had been right to conclude that not all injury to feelings would amount to ‘distress’ and that irritation or frustration was not the same as distress. It concluded that there was nothing in the recent judgments in Halliday v Creation Consumer Finance or Vidal-Hall v Google which required a different result. Moreover, the UT was not prepared to accept that the FTT had failed to take into account evidence before it arguably suggesting that individual complainants were in fact substantially distressed by the messages. In the UT’s view the FTT had plainly been mindful of this evidence when it reached its conclusions (paras. 67-73).
Perhaps the most telling line in the judgment is to be found in paragraph 65 where the UT, having noted that the Commissioner had probably done all he could to draw Mr Niebel into the cross-hairs of the legislation, went on to conclude that the most profitable course would be for ‘the statutory test to be revisited with a view to making it better fit the objectives of the 2002 Directive (as amended). So, for example, a statutory test that was formulated in terms of e.g. annoyance, inconvenience and/or irritation, rather than “substantial damage or substantial distress”, might well have resulted in a different outcome. What cannot be doubted is that, absent a successful appeal against the UT’s decision, this legislation will need to be revisited so as to avoid a situation where the spammers end up laughing all the way to the bank whilst the penalties regime descends into obsolescence.
However, I should add that the picture is not altogether rosy for the spammers of this world. According to recent media reports, John Lewis has recently had to pay out damages to Roddy Mansfield, Sky News producer, after it sent him an unsolicited marketing email (see the Sky News report of the matter here – the report does not confirm the quantum of the damages). This rather raises the question of whether, in the face of an apparently deficient monetary penalty regime, the best cure for the disease of unlawful spamming might be to mount a group action.
The Niebel case was another 11KBW affair with Robin Hopkins acting for Mr Niebel and James Cornwell acting for the ICO.