Phonepayplus Ltd v Ashraf & Anor
2014
CHANCERY DIVISION
United Kingdom
CORAM
- Hearing dates: 12-13 November, 4 December 2014
- Judgment date: 19 December 2014
Areas of Law
- Administrative Law
- Commercial Law
- Constitutional Law
- Contract Law
2014
CHANCERY DIVISION
United Kingdom
CORAM
AI Generated Summary
The case involves the enforcement of fines imposed on a Premium Rate Service (PRS) provider under the Communications Act 2003. The primary issue was whether the PRS oversight body (PPP) or the UK communications regulator (OFCOM) had the authority to enforce these fines. The court ruled that PPP had the enforcement power under delegation from OFCOM. The Code's provisions allowing PPP to impose fines were considered implicitly subject to statutory limitations, and not ultra vires.
This dispute arises out of Section 120 and following of the Communications Act 2003 ("the Act") which concern the regulation of what are called premium rate services, or "PRS" for short.
PRS are basically businesses where a member of the public is induced to ring up a telephone number, at a cost significantly in excess of the cost of an ordinary telephone call, so as to access a service which is held out as being valuable. It is an area of commercial life open to abuse of innocent consumers by unscrupulous entrepreneurs and therefore considered by the European Union and the UK Parliament to require regulation.
The present case is concerned with the legality of the imposition of fines upon PRS providers under the code approved under the Act. The regulator under the Act is OFCOM. Sections 120 and 121 of the Act enable OFCOM to approve a code for the purpose of setting "conditions .. that bind the persons to whom [those conditions] are applied": s. 120(1) and 121. S. 120(3)(a) then goes on to provide:
"(3) The only provision that may be made by conditions under this section is provision requiring the person to whom the condition applies to comply, to the extent required by the condition, with—
directions given in accordance with an approved code by the enforcement authority and for the purpose of enforcing its provisions; and
if there is no such code, the provisions of the order for the time being in force under section 122. "
S. 121C5) of the Act provides:
"(5) The provision for the enforcement of a code that may be approved under this section includes—
provision for the payment, to a person specified in the code, ofa penalty not exceeding the maximum penaltyfor the time being specified in section 123(2);
S. 123(2) provides:
"The amount of the penalty imposed under section 96 as applied by [s. 123(1)] is to be such amount not exceeding E250,000 as OFCOM determine to be(a) appropriate; and
(b) proportionate to the contravention in respect ofwhich it is imposed. '
The Code, approved by OFCOM, which applied at the material time was the Code of Practice 12 th Edition ("the Code"), that was produced by the Claimant ("PPP"). It is common ground that PPP was "the enforcement authority" at the material time for the purposes of s. 120, and was therefore "the person who under the code has the function of enforcing it': s. 120(3)(a) and (15).
The Code, having been approved by OFCOM under s. 121 of the Act, came into force on 1 September 2011. As appear