Insights Upper Tier Tribunal dismisses appeal against fines from the Information Commissioner in relation to unlawful direct marketing by Leave.EU and Eldon Insurance

On 1 February 2019 the Information Commissioner issued notices against Leave.EU Group Ltd and Eldon Insurance Services Ltd (the appellants). These two companies were distinct legal entities, but members of the same corporate group. The Commissioner also issued a monetary penalty notice (MPN) against Leave.EU for £45,000, and against Eldon for £60,000. Both the MPNs and the notices related to the sending of over one million unsolicited electronic newsletters and emails to Leave.EU subscribers in breach of regulation 22 of the Privacy and Electronics Communications (EC Directive) Regulations 2003 (PECR). The communications consisted of political campaigning material, but some of them also contained marketing material from Eldon in relation to its insurance products.

The First-Tier Tribunal (FTT) dismissed the appellants’ appeals against the Commissioner’s decisions. Accordingly, the appellants appealed to the Upper Tier Tribunal (UTT). The UTT rejected the appellants’ argument that regulation 22 of the PECR was exclusively confined to spamming. Rather, the UTT said, the tenor of the legislation is that it is an intrusion on an individual’s privacy if they receive direct marketing to which they did not consent. Ordinary principles of statutory interpretation had to be applied.

The appellants argued that the Leave.EU newsletters were not “unsolicited communications for the purposes of direct marketing” under regulation 22. The UTT noted that Leave.EU subscribers had signed up for the Brexit newsletters, so they were not unsolicited, and the newsletters were plainly for the purpose of political campaigning, not direct marketing. However, regulation 22(2) provides for the general rule that “a person shall neither transmit, nor instigate the transmission of, unsolicited communications for the purposes of direct marketing by means of electronic mail”. Regulation 2(1) defines “communication” as “any information exchanged or conveyed between a finite number of parties by means of a public electronic communications service”. “Electronic mail”, in turn, means any text, voice, sound or image message sent over a public electronic communications network which can be stored in the network or in the recipient’s terminal equipment until it is collected by the recipient”.

The UTT said that the “unsolicited communications” for the purpose of regulation 22(2) were not, therefore, the Leave.EU newsletters themselves. An email may contain different types of “information”, it said. Here, some of the information was in the nature of political campaigning information, and some was direct marketing. The UTT said that an email is simply a vehicle by which a “communication” (which may contain different types of “information”) is delivered to the subscriber; it is not the “communication” itself. Here, it was the promotional marketing material that was the “communication”, not the email.

On the issue of consent, the FTT had found that subscribers’ consent to receive information that Leave.EU felt might interest them was so all-encompassing as to fail to meet the necessary standard of consent being freely-given, specific and informed”. Thus, it was accepted that Leave.EU’s subscribers had consented to receiving the Brexit newsletters; the question was whether they had consented to receiving direct marketing information from Eldon as well. There was no suggestion that the consent of Leave.EU subscribers to receiving the newsletters was anything other than “freely given”. The issue was whether the consent was “specific and informed”.

The UTT held that there was no indication that subscribers were doing anything other than signing up for a Brexit newsletter. Agreeing to the very loosely drafted privacy policy amounted to signing a blank cheque, it said. In short, Leave.EU’s approach frustrated the ability of its subscribers to consent to receiving a political newsletter and nothing else. Accordingly, the FTT was entitled to find that subscribers did not consent to receiving the direct marketing information.

Eldon accepted that it had participated in, and indeed had made, certain decisions about the promotional material (e.g. as to the level of the discount and the branding), but said that the FTT had erred in law by equating participation in, or control over, such decisions, with positive encouragement from Eldon in respect of the newsletters. The UTT disagreed, finding that here was ample evidence on which the FTT could and did conclude that Eldon had “instigated” the transmission of communications for the purposes of direct marketing in the sense set out in regulation 22(2).

As for the MPNs, the appellants argued that the FTT had erred in law in finding that they ought to have known that the inclusion of the promotional material in the Leave.EU newsletters risked contravening the PECR. Further, they said that the FTT had erred in finding that the newsletters were a “serious contravention” of the PECR.

On “serious contravention”, the UTT said that the assessment of seriousness was ultimately a question of factual judgement and that the FTT had been entitled to consider the number of emails sent in order to give a sense of scale. On any reckoning, over a million emails was a serious number and the FTT was entitled to take that as a starting point.

As for the question of knowledge of the risk of contravention of the PECR, the UTT said that the FTT’s decision had to be read as a whole, including the findings that Leave.EU’s internal policies contained no reference to the PECR and that there was no training in relation to the regulations. In short, there was ample justification for the FTT’s conclusion that both appellants should have known that there was a risk that a PECR contravention would occur and had failed to take reasonable steps to prevent it.

The UTT also found that the Commissioner had exercised her powers in accordance with the statutory framework and there was nothing in the Regulatory Action Policy that precluded her from so acting. Further, there was no error in law on the issue of proportionality. The UTT said that the appellants’ argument on proportionality was no more than a thinly disguised invitation to the Upper Tribunal to determine the merits for itself, rather than to identify an error of law”.

Finally, the UTT found that the notices were lawful and complied with s 146 of the Data Protection Act 2018. Further, it said that there had been no procedural unfairness in the Commissioner’s decision to issue the notices such as to render the decision wrong overall. The appeal was dismissed. (Leave.EU Group Ltd v The Information Commissioner [2021] UKUT 26 (AAC) (8 February 2021) — to read the judgment in full, click here).