A £15m “racket” shows why we need libel reform


2:01 pm - July 3rd 2012

by Robert Sharp    


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I was in the House of Commons Committee Room 9 last week, listening to the 5th sitting of the Defamation Bill Committee (on behalf of English PEN and the Libel Reform Campaign)

During the exchanges, Denis MacShane brought to light a case where the Citizens Advice Bureau and others have been threatened with libel action for discussing and criticising civil recovery schemes, specifically the practices of a company called Retail Loss Prevention.

From the Hansard:

[T]he law firm Schillings is showering defamation writs on the citizens advice bureau—one of the most prestigious and respected of all the voluntary organisations that we all have relationships with—as well as the law firm Bates Wells and Braithwaite, the Justice Gap website and the consumer websites Legal Beagles and Consumer Action Group.

Why is Schillings doing that? It is because there is an extremely unpleasant practice now taking place in our retail industry—developed, I am sad to say, under a Labour Government—called civil recovery. In essence, 90% of all shoplifting in our stores is organised by gangs. About 8% or 9% is done by in-house stealing. The tiny 1% is done—frankly, for the most part—by rather sad people. I am not condoning shoplifting; none of us would. Quite a lot of people who walk out of Tesco or Boots have not put in the correct barcode. We have all had that problem now since we have had to, as it were, do our own till accounting. Then the people are pulled back into the shop, taken into a little room and told that they could face prosecution, but Tesco, TK Maxx, Boots or Primark will not prosecute. Instead they will ask for names and addresses and a few weeks later a company in Nottingham called Retail Loss Prevention … sends a threatening letter to the person saying that unless they immediately pay £150 or £180, they may face prosecution.

Most of the people are children or adolescents, often from families without much structure. They are terrified out of their wits. Retail Loss Prevention … says that this practice has been approved by the Association of Police Chief Officers and is thoroughly legal. It is not. It is a threat to obtain money, because the point of detention is not to go forward and hand the shoplifter—if that is the case, and we are not condoning it—over to the police for prosecution.

This is a £15 million racket used by a lot of major companies—corporate groups—such as Boots, TK Maxx, Primark, Debenhams, Superdrug and Tesco. They are all shops that we use. These bodies corporate are going to another body corporate called Retail Loss Prevention and getting it to obtain money from very vulnerable people. When the CAB, also a body corporate, seeks to take up the cases, it then faces defamation writs from Schillings.

One of the organisations that has received threatening letters is the Legal Beagles website. 

Kate Briscoe, one of the people who runs the site, explained more about their tribulations at a recent rally for Libel reform [video]. 

Legal Beagles have posted the letter they received from Schillings on their site.

This issue is a fantastic example of why we need Libel Reform.  This is an industry that has been acused of taking advantage of vulnerable people, and short-circuiting the legal process in an extremely opaque manner.

Yet the current law – and the new measures proposed in the Defamation Bill – do not do enough to protect and promote public interest reporting.

Denis MacShane’s speech also presents an awkward moment for Labour and the Left.  The rise of civil recovery happened in the past decade, under a Labour Government.  Since Ed Miliband has got into the habit of apologising for bad Labour policies, perhaps someone from the Front Bench would apologise for allowing the rise of a practice that replaces due process for young, poor and vulnerable people?

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About the author
Robert Sharp designed the Liberal Conspiracy site. He is Head of Campaigns at English PEN, a blogger, and a founder of digital design company Fifty Nine Productions. For more of this sort of thing, visit Rob's eponymous blog or follow him on Twitter @robertsharp59. All posts here are written in a personal capacity, obviously.
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Story Filed Under: Civil liberties ,Law

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Reader comments


That’s a useless example for libel reform, like most of the examples brought forward.

Was anybody actually sued? No.
Did any of these consumer advice groups have to pay anything to Retail Loss Prevention? No.
Were the consumer advice groups ordered by a court to stop their work? No.

To sum it up: nothing happened, except that they received a letter by a law firm.
Whenever I have clients in similar situations, I tell them to ignore these letters (although publishing them online is also fun). Let the bastards go to court, if they want publicity.

I hope libel reform won’t be based on some people’s fear of receiving intimidating letters by lawyers. A lawyer is not a court. He can’t order anyone to do anything.

2. Chaise Guevara

@ 1 Andreas

You’re missing the point that current libel law makes it easy for the threat of a libel case to be used as an intimidation tactic. It’s geared towards the plaintiff and is apparently easy to stretch out into a long and expensive process in an attempt to either bankrupt the defendant or simply ruin their life by demanding most of their time for months on end.

I don’t know enough about the law to comment on whether Schillings is acting reasonably. But in general, bullying people into silence via threat of litigation is a *side-effect* of our current draconian libel system.

I don’t approve of libel writs for criticising a policy, but civil recovery, as described, doesn’t strike me as a racket at all. It gives minor shoplifters the opportunity to settle their damages without expensive recourse to the courts and a resulting criminal conviction (which can be very damaging to someone’s prospects).

Whenever I have clients in similar situations, I tell them to ignore these letters (although publishing them online is also fun). Let the bastards go to court, if they want publicity.

Quite right, refer them to the answer given in Arkell v Pressdram.

It is very dishonest of these corporations to tell the shoplifter they are not going to prosecute, if they don’t make clear they intend to pass on their details and let a company persecute them for money.

It smacks of the ever privatisation of law and order. Just like the military industrial complex, we are now creating a law and order industrial complex. This includes private prisons, security firms, clampers, and dodgy solicitors and corporate thugs.

Seeing as many corporations are pushing self service tills you could argue this is a form of entrapment.

As with copyright enforcement, I’ve always found it baffling why we view it as acceptable to waste the time of the police, the criminal justice system and even the prison system on subsidising the actions of highly profitable corporations.

(after all, shoplifting clearly does nobody any emotional or physical harm, and its only other effect is to slightly reduce the dividends paid to wealthy shareholders. Hell, shoplifting from companies such as Boots and Arcadia is a morally legitimate form of retribution for their far worse financial sins…)

However, RLP’s actions here appear to provide a partial answer to that one – i.e. because if the corporations and their friends in the civil courts were left to sort it out among themselves, then the outcome for society would be even more iniquitous.

Nick: “settle their damages” is bollocks, because the shops lie that the cost of the security guard (who’d otherwise be sitting about doing fuck all) processing the shoplifter is billable at an exorbitant rate (not the NMW he’s actually being paid) as part of the “damages” done, and the courts often accept that lie. Sure, if someone nicks a pound’s worth of stuff, and the supermarket wants to sue them for a pound, that’d be an improvement on the status quo.

7. Planeshift

“To sum it up: nothing happened, except that they received a letter by a law firm.
Whenever I have clients in similar situations, I tell them to ignore these letters ”

You and Tim are missing the point, probably because receiving a letter from a law firm is quite normal for you due to your day jobs.

For most members of the public, it is not a usual thing recieving a letter from a law firm, and the type of language used can often appear intimidating and threatening. For people who are vulnerable, who possibly have mental health issues (the type of people who fall into Macshane’s 1% of sad shoplifters), the effect could be to induce serious ill health. Hence the need for the citizens advice bureau, who have the perfect right to raise this issue without getting threats – perhaps if they had been threatened as a result of saying something racist the right would have been more inclined to defend free speech?

There is of course a need for those people to be punished for shoplifting, but this scheme appears to be nothing more than a profit making excersise – if the stores called the police the result would probably be a caution.

The second point you have missed is that fighting a libel action is long, expensive, and costly if you lose. For a charity to even consider fighting it they must have a strong case, otherwise the trustees have to – by law – consider it too risky. It is not worth risking the entire future of an organisation on it. Hence law firms know that a simple letter threatening a writ will shut them up. I’ve personally experienced this twice whilst working for small charities, and the experience also has the effect of ensuring people who work in the sector excersise self censorship,

8. Robin Levett

@Chaise Guevara #2:

There are libel reforms required – bu they are not in this area.

But in general, bullying people into silence via threat of litigation is a *side-effect* of our current draconian libel system.

No. It’s a side-effect of hysteria about how iniquitous our libel law actually is. It isn’t; I can see any number of decent defences to such a claim, and no doubt Schillings can as well.

By the way; the US system, held up as a paragon in matters defamatory, would not stop this happening. other than by an anti-SLAPP suit.

@ Nick #3:

I don’t approve of libel writs for criticising a policy, but civil recovery, as described, doesn’t strike me as a racket at all. It gives minor shoplifters the opportunity to settle their damages without expensive recourse to the courts and a resulting criminal conviction (which can be very damaging to someone’s prospects).

If the shoplifters are being asked to pay back more than the loss caused by the theft under threat of prosecution, then this is blackmail. It is a demand with menaces; there is no basis for belief that demanding payment of more than the loss caused is reasonable, so the demand is unwarranted.

9. Trooper Thompson

I’ve got nothing against shops going after thieves via the civil law. I think John B’s point @ 6: “shoplifting clearly does nobody any emotional or physical harm, and its only other effect is to slightly reduce the dividends paid to wealthy shareholders.” is a sweeping statement and wrong for a number of reasons. Shop-lifters are thieves and should be, at the very least, made to pay back for the harm they have done. Not all shops are owned by ‘wealthy shareholders’, and even if they were, so what?

Regarding libel laws, abolish them, I reckon.

@ Robin,

“I can see any number of decent defences to such a claim, and no doubt Schillings can as well.”

Fine, but for those outside the legal world, it often seems like a casino, where the rules of the game are not very clear.

“there is no basis for belief that demanding payment of more than the loss caused is reasonable,”

But surely the other side will claim that they are covering the cost of recovery.

But surely the other side will claim that they are covering the cost of recovery.

Yes, indeed they do. As above.

11. Chaise Guevara

@ 8 Robin

“No. It’s a side-effect of hysteria about how iniquitous our libel law actually is. It isn’t; I can see any number of decent defences to such a claim, and no doubt Schillings can as well.”

Like I said, I’m not talking about this case specifically; IANAL and for all I know Schillings are acting completely reasonably. But lawsuits ARE used to bully critics into silence (http://en.wikipedia.org/wiki/BCA_v._Singh) and that means that threats of lawsuits can also be used that way.

12. Planeshift

“No. It’s a side-effect of hysteria about how iniquitous our libel law actually is. It isn’t; I can see any number of decent defences to such a claim, and no doubt Schillings can as well.”

How much will it initially cost the CAB to mount the number of decent defences, and how much does it stand to lose if the case goes against them?

If you were a trustee of the CAB would you risk it?

This business of big retailers threatening shoplifters with prosecution is absolutely appalling.

As johnb says above

“shoplifting clearly does nobody any emotional or physical harm, and its only other effect is to slightly reduce the dividends paid to wealthy shareholders. Hell, shoplifting from companies such as Boots and Arcadia is a morally legitimate form of retribution”.

Sharia law. That would solve the problem.

Just cut their hands off and put them on display in the frozen food section.

Thanks for all the comments, folks. A good debate about the ‘side-effect’ argument.

Listening to the stories of individual bloggers who are neither traditional journalists or lawyers, I’m convinced that even an empty-threat legal letter can have a huge chill on free speech.


Reactions: Twitter, blogs
  1. Liberal Conspiracy

    A £15m "racket" shows why we need libel reform http://t.co/G99TH1Gh

  2. Deborah George

    A £15m "racket" shows why we need libel reform http://t.co/G99TH1Gh

  3. Jason Brickley

    A £15m “racket” shows why we need libel reform http://t.co/rrXUIQAb

  4. Joan L

    A £15m "racket" shows why we need libel reform http://t.co/G99TH1Gh

  5. Paul W

    RT @libcon: £15m "racket" shows why we need libel reform
    http://t.co/rSDcnVZJ
    … and an end to legitimised extortion as a whole.

  6. leftlinks

    Liberal Conspiracy – A £15m “racket” shows why we need libel reform http://t.co/LQRKnmFP

  7. Tony Finch

    http://t.co/YY5jGiAN – Defend yourself against legal threats from Retail Loss Prevention Ltd and get a defamation writ from Schillings.

  8. Nik, London 2012

    http://t.co/YY5jGiAN – Defend yourself against legal threats from Retail Loss Prevention Ltd and get a defamation writ from Schillings.

  9. BevR

    A £15m “racket” shows why we need libel reform | Liberal Conspiracy http://t.co/f4CJqV2E via @libcon

  10. BevR

    A £15m “racket” shows why we need libel reform | Liberal Conspiracy http://t.co/f4CJqV2E via @libcon

  11. Mark Smithson

    A £15m “racket” shows why we need libel reform | Liberal Conspiracy http://t.co/f4CJqV2E via @libcon

  12. robertsharp59

    By me, at @libcon -> A £15m "racket" shows why we need libel reform http://t.co/Ynd5poei

  13. LegalBeagles

    A £15m “racket” shows why we need libel reform | Liberal Conspiracy http://t.co/jhl3NJZz via @libcon

  14. LegalBeagles

    A £15m “racket” shows why we need libel reform | Liberal Conspiracy http://t.co/jhl3NJZz via @libcon

  15. Shaun Knight

    A £15m “racket” shows why we need libel reform | Liberal Conspiracy http://t.co/jhl3NJZz via @libcon





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