Be careful how you go about recovering money that is owed you – you might fall foul of the Protection from Harassment Act and end up paying them

You do the work, you do it well and you finish it on time. You therefore expect to be paid on time. But you are not. So you naturally chase your client for your money – hardly an unusual situation these days.

At best you get all your money; at worst you find yourself being prosecuted under the Protection from Harassment Act 1997.

This piece of legislation was brought in to deal with stalkers but is now being used in a variety of other situations, including the employer/employee relationship in bullying cases and debt recovery matters.

The act provides that a person must not pursue a course of conduct that amounts to harassment of another, and that they know or ought to know amounts to harassment. What amounts to harassment is not clear, however, and many cases have argued over its interpretation.

The Court of Appeal in Lisa Ferguson vs British Gas Trading was faced with this issue in the context of a debt recovery claim. In a particularly badly handled debt recovery action, British Gas sent Ferguson bill after bill and threatening letter after threatening letter. Such threats included one to cut her off. She was also threatened with legal proceedings and more importantly for her, as a business woman, threats to report her to credit rating agencies.

Ferguson sued British Gas saying that its behaviour amounted to unlawful harassment. She claimed £5,000 for distress and anxiety and £5,000 for financial loss due to the time that she had lost and expenses that she had incurred in dealing with British Gas.

British Gas tried to strike out her claim saying that it was perfectly correct for them to treat customers in this way, not least because they were generated by computer.

The Court of Appeal would have none of these arguments and said its behaviour could amount to harassment. Indeed, it was enough to justify the bringing of criminal proceedings.

The Court of Appeal also rejected British Gas’ argument that a large corporation like it could not be legally liable for mistakes made by either their computerised debt recovery system or those programming it.

What amounts to harassment is not clear, and many cases have argued over its interpretation

The Protection from Harassment Act was also considered in S&D Property Investments vs Nisbet.

This case started off as a straightforward debt recovery action in the sum of £111,579, said to be due from Mr Nisbet for a loan for property development.

Nisbet admitted the debt but sought to counterclaim damages for harassment by Mr French, a director of S&D. He maintained that S&D was vicariously liable for French’s behaviour and argued that his counter claim should be set off in extinction or reduction of S&D’s claim.

French acknowledged that previously he had a reputation for extreme violence, having been involved in gang crime. However, he maintained that he now campaigned against violence.

The judge accepted that French’s frequent and insistent chasing of the debt was not harassment but that when he made reference to being tempted to beat Nisbet, this was oppressive and unacceptable and amounted to harassment.

He made a similar finding in relation to an email where French said, “I will come [round] and update you personally”.

The court also had little trouble in accepting that French, calling at Nisbet’s house on two occasions and shouting abuse amounted to harassment. Hardly surprising as French had previously been convicted of using threatening, abusive and insulting words on those occasions.

Both these cases show that oppressive and unacceptable behaviour in seeking to recover a debt can backfire and result in the payment of compensation for distress and anxiety and financial loss.