Note: This article is the subject of a legal dispute.

BWB acted pro bono in the first contested case concerning the compensation demands routinely made by retailers against those accused of shoplifting.

The judgment deals a potentially fatal blow to the practice of 'civil recovery' by retailers and their agents, and represents a major victory for Citizens Advice, which has campaigned on the issue for several years.

Citizens Advice reports that, since 1998, over 750,000 people [1] have received letters demanding substantial sums as compensation for alleged shoplifting or employee theft. Most cases reported to Citizens Advice involve alleged shoplifting. The value of the goods is usually low, and in 80% of cases they are recovered fit for resale. Police involvement is rare. Despite this, demands are issued in pre-determined sums, fixed according to the value of the goods involved.

The demands are issued on behalf of retailers by 'civil recovery' agents. By far the largest of these (responsible for 4 in 5 cases seen by Citizens Advice) is Retail Loss Prevention Limited (RLP). RLP is understood to retain at least 40% of the sums it recovers for its retailer clients, which include (or have included) nearly all of the biggest names on the high street [2].

The use of "civil recovery" demands by retailers and their agents raises serious concerns. The recipients are often very young, mentally ill or vulnerable in other ways. The alleged theft is often strongly denied.

Moreover, it is very doubtful that the case law cited by RLP and other agents in support of their demands in fact establishes that the amounts claimed are recoverable in cases of low value alleged shoplifting. Despite their routine threats of court action, the retailers and agents had never litigated such a claim to a contested trial in order to test these legal principles.

This led Citizens Advice to conclude that "the practice of threatened civil recovery relies on fear and/or shame, and ignorance of the law, for its effectiveness" [3].

A retailer v Ms B & Ms K [4] is the first case in which a civil recovery claim for low-value shoplifting has been contested to a full trial. The case, which concerned two teenage girls caught stealing from a high street retailer, was heard before HHJ Charles Harris QC at Oxford County Court. Judgment was handed down on 9 May 2012.

The retailer's claim was dismissed in its entirety and permission to appeal was refused.

In A retailer, the goods were recovered and placed back on sale. Using RLP as its agent, the retailer claimed £137.50 as a 'contribution' towards the losses it claimed to have suffered as a result of the theft. It asserted that its total losses were almost £300. On cross-examination of the claimant's witnesses this sum was shown to be significantly exaggerated.

The principal loss claimed was £82.50 as 'staff/management time investigating and/or dealing with the incident'. This claim was rejected on the principle set out in Aerospace Publishing v Thames Water [5]: the claimant had failed to establish that its security staff had been diverted from their ordinary duties, still less that any such diversion would have caused significant disruption to the claimant's business. The other elements of the claim (£30.25 for 'apportioned security and surveillance costs' and £24.75 for 'administrative costs resulting from [the Defendants'] wrongful actions') also failed.

Alex de Jongh of BWB's dispute resolution group acted for the First Defendant, instructing Matthew Hodson of Farrar's Building. Counsel for the Second Defendant was Edmund Townsend, also of Farrar's Building. All acted pro bono.

For Private Eye's coverage of the case, click here.

[1] http://thejusticegap.com/News/a-fatal-blow-to-the-reeling-civil-recovery-industry

[2] www.citizensadvice.org.uk/index/policy/policy_publications/er_legal/unreasonable_demands-2.htm, p.24

[3] www.citizensadvice.org.uk/index/policy/policy_publications/er_legal/uncivil_recovery.htm

[4] An order anonymising the parties is in place.

[5] Aerospace Publishing Ltd & Anor v Thames Water Utilities Ltd [2007] EWCA Civ 3, per Wilson LJ at paragraph 86.


Posted on 17/05/2012 in BWB News

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