Personal liability for directors over nuisance calls

The government has announced its proposals to impose civil penalties of up to £500,000 on directors of companies in breach of nuisance call rules under the Privacy and Electronic Communications (EC Directive) Regulations 2003 (PECR).

It is proposed that the new power to impose civil penalties will rest with the Information Commissioner’s Office (ICO). The ICO has had the power since April 2015 to fine companies responsible for unsolicited electronic marketing communications (such as by phone or text message) up to £500,000 for breach of PECR. However, despite this, it was reported that in 2017 there have been over 130,000 reported complaints to the ICO from people who had received nuisance calls, texts or other electronic marketing messages.

Furthermore, according to the ICO, of the 27 fines issued between April 2015 and the end of 2017, only nine have been paid in full.

The government’s consultation paper identifies one of the reasons the current ICO power to fine companies is not always effective is that companies who are fined by the ICO can avoid paying the fines by being dissolved at the point they are issued with a fine and re-emerging under a new company with a new name (known as “phoenixing”).

The government’s new proposal is a measure designed to tackle the problem of nuisance calls. Under the proposals, if a company has multiple directors, each director could also be liable for a fine (i.e. not just the company itself). Additionally, the legal threshold at which the ICO may impose a monetary penalty on organisations for breaching  PECR has been lowered, as the previous requirement to show that the call caused ‘substantial damage’ or ‘substantial distress’ has been removed.

The consultation on the new proposals runs until 21 August 2018.