Domestic & General Group Limited & Ors v Premier Protect Holdings Limited & Ors

Introduction

The claimants, who are providers of home appliance protection plans (“Plans”), accuse the defendants of the torts of causing loss by unlawful means and unlawful means conspiracy. The first, third, fifth and ninth defendants (“the defendant traders”) are, or were, providers of Plans and are, or were, controlled by the second, fourth and tenth defendants. I will refer to the first to fifth, ninth and tenth defendants as the “principal defendants”. The defendant traders obtain, or obtained, business through “cold” calls made on their behalf to potential customers, many of whom are, or were, existing customers of the claimants.

In summary, the claimants allege that: fraudulent misrepresentations were made in the course of those calls; many customers of the claimants were induced by those fraudulent misrepresentations to take out Plans with the defendant traders; as a result, many of those customers cancelled, or did not renew, their Plans with the claimants; the defendants encouraged the making of the fraudulent misrepresentations; and the defendants did so with the intention of taking customers’ business away from the claimants.

The trial was a trial of various issues relating to liability and injunctive relief.

The claimants contend that the defendant traders include a series of “phoenix” companies, carrying on the same business in succession, as follows:

Only three of the eleven defendants were represented at trial. The position of the defendants was as follows:

The first claimant is the parent company of the second claimant (“D&G Insurance”). The third claimant (“D&G Services”) is another company in the D&G group of companies. D&G Insurance and D&G Services are the group’s principal operating companies in the United Kingdom. They offer Plans which take two main forms: (a) an insurance product provided by D&G Insurance, which is regulated by the Prudential Regulation Authority and the Financial Conduct Authority (“the FCA”); or (b) a contract for services provided by D&G Services.

The claimants’ Plans typically provide a customer with: (a) extended warranty protection, i.e., protection in the same terms as the manufacturer’s warranty, which incepts upon the expiry of the manufacturer’s warranty; and (b) accidental damage protection, which runs alongside the manufacturer’s warranty and/or any extended warranty. Plans can be provided on a subscription basis, with the customer paying regular instalments, or a cash basis, with the customer making a single payment for a fixed period, after which the Plan can be renewed. Some Plans renew automatically, subject to the customer being informed of the right to cancel prior to renewal, while others require positive action on the part of the customer to renew.

Plans are provided on both a “white label” basis, i.e. in association with, and in the name of, the manufacturer of an appliance (e.g. Sky), and an “own name” basis.

The claimants and others have been concerned for some years about the activities of what they call “rogue traders”, i.e. companies who conduct their businesses in the manner in which the claimants contend that the defendant traders conducted their businesses. The claimants were alerted to these activities by complaints made to them by customers of theirs who had been called by alleged rogue traders. For some years the claimants have logged customer complaints on an internal system called “ChitChat”. It was as a result of customer complaints that the claimants identified the defendants as parties against whom they wished to bring a claim.

The present action is one of a series of actions brought by the claimants against alleged rogue traders. For instance, an article published in the Evening Standard on 27 November 2019 referred to four actions which the claimants had brought against various alleged rogue traders.

The activities of alleged rogue traders are also of interest to various regulators. For instance:

Although Mr Ali claimed at one stage that Apex Assure never had any live customers, it is clear that it did. It was also denied that Home Protect ever traded, but there was evidence of at least some trading by Home Protect. The defendant traders offered Plans to individuals, who included customers of the claimants:

This can be seen, inter alia, from the claimants’ customer complaints records. Customers called the claimants to complain after they had received a cold call from a representative of a company who tried to sell them a Plan. I will consider these complaints in more detail later. It is relevant to note when the claimants first received a complaint about each of the defendant traders, which was:

The first to fifth defendants admitted in their defence that Apex Assure was the successor business to Premier Protect. Mr Ali said in his statement that Apex Assure started its business with all the resources of Premier Protect and that Premier Protect managed Apex Assure for the time it was open.

There is, however, a dispute whether UKSP took over the business of Apex Assure. I will consider that issue later.

Each of the defendant traders engaged companies operating call centres, who called potential customers. The call centres who contracted with the defendant traders have been referred to as “direct agents”. The direct agents in turn retained other call centres as sub-agents, whose employees made many of the customer calls which produced business for the defendant traders. Thus:

The position in relation to UKSP was less clear.

Mr Akayour has described himself as, and I find that he was, a director of PRO. Call 360 was a continuation of PRO. Mr Akayour was also the sole director and shareholder of Domestic Guardian, which was incorporated on 15 March 2019 and dissolved on 7 December 2021.

Joseph MacDonald, who worked for Premier Protect and then UKSP, was the sole shareholder and director of Hi5, which was incorporated on 5 July 2021. However, Mark Abadi, who had dealings with Mr Akayour and who was subsequently interviewed by Mr Peerless Mountford, identified Hi5 as a new name for Mr Akayour’s call centre business. Hi5 made substantial payments to Mr Akayour in 2023 and I find that it was his business.

The number of customer calls made on behalf of the defendant traders were significant. According to the ICO’s Penalty Notice, over 2 million calls were made from Apex Assure’s telephone numbers in the 6 months from February to July 2021.

Customers would not be signed up to Plans with the defendant traders until they had received two telephone calls, which I will call an “initial customer call” and a “follow-up customer call”.

Scripts were prepared for customer calls. I have seen a few such scripts and will consider them in more detail later. Customer calls were recorded. However:

The claimants called only three witnesses at trial, namely Roberto Pagliarulo, the claimants’ solicitor, Mr Peerless Mountford and Caroline Kitson, who spoke of the way in which a UKSP Plan was sold to her mother. Their evidence did not add a great deal to the underlying documents, which consisted primarily, in Mr Pagliarulo’s case, of the documents disclosed by the claimants, including their records of complaints and of the Plans which customers took out and renewed and/or cancelled and, in Mr Peerless Mountford’s case, of the documents seized from Apex Assure’s premises.

Mr Akayour and Mr Ali did not give evidence at trial, but I have considered the witness statements and other statements which they made before trial. I do not consider them to be reliable witnesses.

I accept that Mr Ali has made a number of false claims in the course of these proceedings, as follows:

I also accept that Mr Akayour made the false claim that Premier Protect never made any outbound calls itself (since Apex Assure took over Premier Protect’s business and Apex Assure did make customer calls itself) and that he gave evidence about the management of PRO which was misleading, because he did not disclose that he was a director of PRO.

Moreover, as I will explain, both Mr Akayour and Mr Ali have been found to be in contempt of court in relation to their defence of this action, particularly in relation to complying with their disclosure obligations.

The only witnesses called by any of the defendants at trial were Mr Dhimi and Mr Khan. I will say more about their evidence later. In short:

In addition to the documents which they had disclosed, the claimants relied on such documents as were disclosed by the defendants, while contending that the defendants’ disclosure was seriously deficient.

The claimants invited me to draw adverse inferences from the defendants’ response to their disclosure obligations and from the false statements which I have found were made by Mr Akayour, Mr Ali and Mr Dhimi and what the claimants contended were false statements made by Mr Khan. The claimants relied in this respect on paragraph 52 of Andrew Popplewell QC’s judgment in Do-Buy 925 Limited v National Westminster Bank Plc [2010] EWHC 2862 (QB) and paragraph 69 of HHJ Clarke’s judgment in PSN Recruitment Limited v Ludley [2023] EWHC 3153 (IPEC). In the former case, Andrew Popplewell QC said as follows:

“It is a commonplace in civil frauds that the party making the allegation can often do no more than point to the acts of the alleged conspirators and seek to demolish the innocent explanations put forward, not infrequently relying on their inherent improbability and internal inconsistencies rather than any directly contradictory evidence. If a Court rejects those explanations, it may legitimately conclude that the conspiracy is established both by reference to that being the most probable alternative explanation and by an inference to be drawn from the fact that an untrue explanation has been put forward. So far as the second of these is concerned the Court will always keep in mind that as Lewison J said in Abbey Forwarding Ltd (in liquidation) v Hone [2010] EWHC 2029 at paragraph 49 “even where a witness lies about a matter of importance, that does not necessarily mean that he is guilty of whatever it is that he is accused of doing. People tell lies for a number of reasons, including attempting misguidedly to bolster a genuine case.””

It is relevant for a number of reasons to set out the course which this action has taken.

On 21 December 2020 the claimants sent a letter before action to the first to eighth defendants and to Mr Chhabu. The claim form was issued on 14 January 2021. At that stage, only the first to eighth defendants were named as defendants.

On 21 January 2021 Adam Vaitilingam QC, sitting as a deputy high court judge, granted an injunction:

One of the issues for me to decide, issue 6, is whether the first to fourth defendants have acted in breach of paragraph 1(a) of the order of 21 January 2021.

Mr Akayour did not comply with paragraph 3 of the order of 21 January 2021. Mr Ali purported to comply with that order by filing his first witness statement, dated 18 February 2021. In this statement, he explained why he contended that Apex Assure had no documents in the categories ordered to be disclosed and he made what I accept were false statements:

On 11 March 2021 Clare Ambrose, sitting as a deputy high court judge, granted an injunction against the sixth to eighth defendants in the same terms as paragraph 1 of the order of 21 January 2021 and made an order by which, inter alia, she:

Mr Akayour did not comply with the order of 11 March 2021. In purported compliance with paragraph 6 of the order of 11 March 2021, on 16 April 2021 Mr Ali swore and filed an affidavit in which he repeated his false claim that “… at no time has [Apex Assure] made any outbound sales calls itself.” He also said that C3 Marketing only retained recordings of sales calls for 3 months and that PRO and Callforce Global only retained recordings for much shorter periods. Mr Ali said as follows in relation to PRO and Callforce Global in paragraph 25 of his statement:

“As for [PRO] and Callforce Global, my understanding is that the issue with call recording retention is even more acute. This is because the Morocco and India call centres were responsible primarily for lead generation calls. By their nature, the volumes of lead generation calls are much higher than those for verification calls. My understanding is that [PRO] and Callforce Global operate with large teams of agents, making hundreds of calls a day and where any of these calls are recorded, it is only likely to be for a very short period of time as to save them all indefinitely would require huge storage capacity.”

On 20 April 2021 Mr Ali and Apex Assure disclosed 17 recordings of follow-up customer calls conducted by C3 Marketing. They have not disclosed any recordings of initial customer calls.

Mr Akayour made a witness statement on 7 June 2021 in which he said that Premier Protect’s position in relation to call recordings was effectively the same as Apex Assure’s, with the additional point that Premier Protect had ceased selling Plans in November 2020. In paragraph 26 of his statement, Mr Akayour said:

“As for [PRO] and Callforce Global, I have seen what [Mr Ali’s] Affidavit says at paragraph 25. The explanation makes sense to me and I do not have any other information beyond that explanation, save as to note that my understanding is that searching for call recordings by telephone number is only likely to work for calls at the verification stage, rather than the (earlier) lead generation stage. …”

Then in paragraph 30 he said as follows:

“As I have already stated, where Premier Protect is no longer trading, I fear that there is no particular commercial incentive for C3 Marketing to assist as quickly as possible in relation to ongoing searches for historic call recordings.”

This witness statement was misleading because Mr Akayour did not disclose that he was a director of PRO.

The first to fifth defendants filed a defence dated 11 June 2021. The statement of truth was signed by Mr Ali. Paragraph 11 of that defence contained an untrue statement, at least insofar as it related to Apex Assure, namely:

“Neither Premier Protect nor Apex Assure contacted potential customers directly or made calls to potential customers.”

On 27 July 2021 Master Cook made an order granting default judgment against the sixth to eighth defendants.

On 19 May 2022 Master Cook granted a final injunction against the sixth to eighth defendants and made an order giving directions, which included the following:

In August 2022 Mr Akayour provided a list of Premier Protect’s customers, which the claimants contend was incomplete. He did not purport to provide standard disclosure until November 2023, which was after he had been debarred from defending the claim by reason of his failure to give standard disclosure and after the claimants had issued a committal application. His failure to give disclosure was held to be a contempt of court.

Instead of providing a list of Apex Assure’s customers, Mr Ali made the false claim in an email dated 9 September 2022 that Apex Assure never had any live customers. Thereafter, Mr Ali and Apex Assure did not provide a list of Apex Assure’s customers until 7 November 2023, after the claimants had issued a committal application. The list was incomplete.

On 3 November 2022 Simon Tinkler, sitting as a deputy high court judge, granted an injunction against the ninth to eleventh defendants in the same terms as the injunction against the first to fourth defendants and made an order in which he:

Apex Assure and Mr Ali did not comply with paragraph 8 of this order and therefore were debarred from defending the claims against them and were subsequently found to be in contempt of court.

On 11 January 2023 Master Cook made an order:

Mr Dhimi and UKSP provided draft disclosure lists on 29 March 2023 and final lists on 24 July 2023. That disclosure was incomplete and they subsequently consented to an order for specific disclosure.

Mr Khan did not provide a disclosure list until shortly before trial. He has not disclosed any documents, contending that he has none to disclose, given what he says was his limited involvement with UKSP.

On 31 March 2023 Master Cook made an order by paragraph 4 of which he ordered Mr Akayour to provide standard disclosure by 14 April 2023. Mr Akayour failed to comply with this order.

On 20 June 2023 the claimants issued contempt applications against Mr Akayour, Mr Ali and Apex Assure, in respect of which Cotter J gave directions on 11, 13 and 17 October 2023. Then on 11 December 2023 Cotter J held that:

The balance of the contempt applications was adjourned until after the trial.

As I have already noted, in the context of the committal applications, Mr Ali provided a list of Apex Assure customers, but it was incomplete.

On 14 December 2023 Cotter J gave various directions, including orders:

None of the defendants fully complied with the order of 14 December 2023.

At a pre-trial review on 15 January 2024 I gave various directions, including directions:

Notwithstanding the repeated orders made for disclosure, Mr Dhimi continued to disclose documents during the trial, namely emails from two of his email accounts.

The issues for determination at trial were as follows:

I propose to address these issues in this order, save that I will address issue 5 first.

Issue 5 is:

As I have said, the first to fifth defendants have admitted that Apex Assure was the successor business to Premier Protect. Indeed, Mr Ali said as follows in his response to a letter dated 8 January 2024:

While there is an element here of Mr Ali seeking to minimise his role in Apex Assure, I accept that Mr Akayour continued to play a significant role in the management of Apex Assure as it took over the business of Premier Protect. I note, for instance, that, according to the ICO’s Penalty Notice, Apex Assure’s communication services provider said that its end client was not Apex Assure, but PRO, which was Mr Akayour’s company.

However, UKSP and Mr Dhimi denied the claimants’ contention that UKSP was established to continue the business and operations previously conducted by Premier Protect and Apex Assure.

In support of their contention, the claimants relied on evidence that:

The claimants also relied on:

In response, UKSP and Mr Dhimi contended that:

The context for Issue 5 is the following timeline:

Premier Protect and then Apex Assure operated from 127 Gloucester Road, which was occupied pursuant to a 5-year lease granted to Premier Protect in July 2020.

On 10 June 2021 Mr Dhimi completed a form (“the Elavon form”) and sent it to Leon Hewitt of Elavon Financial Services DAC. In the Elavon form, Mr Dhimi gave UKSP’s “Business Trading Address” as 127 Gloucester Road.

UKSP’s registered address had been changed on 12 April 2021 to Mocatta House, Trafalgar House, Brighton BN1 4AF (“Mocatta House”), which appears to have been a business centre. Mr Dhimi correctly gave Mocatta House as UKSP’s registered address in the Elavon form. He also gave it as UKSP’s address in a template customer welcome letter which he sent to Mr Ali on 5 May 2021. However, the only lease for Mocatta House which has been disclosed is dated 17 January 2022 and is for one office. In his evidence, Mr Dhimi described Mocatta House as a virtual address and said that UKSP was not trading from it in May 2021.

When Trading Standards officers raided 127 Gloucester Road on 18 May 2021 they found Mr Ali on the premises together with five individuals, two of whom said that they were employees of Apex Assure and three of whom said that they were employees of Service Home Plan. (Service Home Plan Limited (“SHP”) was incorporated on 23 February 2021. Its sole shareholder and director was Hesham Alouat. Documents found in the Trading Standards raid indicate that SHP carried on business from 127 Gloucester Road alongside Apex Assure.) As will be seen, UKSP started to pay the salary of two of these individuals in June 2021.

The Trading Standards officers also found:

Mr Dhimi’s evidence about UKSP’s business address was thoroughly unsatisfactory. When he was shown the Elavon form, it was suggested to him that he completed the form as he did because 127 Gloucester Road was UKSP’s trading address. He replied, “I don’t recollect writing this so I can’t answer that.” After some questions from me to seek clarification, he said that he was not trading from 127 Gloucester Road. Mr Goodfellow then asked him where the 30 employees UKSP started paying on 30 June 2021 were sitting. Again, his initial answer was non-responsive. When I sought to clarify the question, he replied, “I wouldn’t know because I wasn’t there.”

His evidence ended up being that he had asked Mr Nazman Samingan (a former employee of Premier Protect) to employ some people, but he was not in Brighton at the time they were employed and he did not know where they were working, because he had left that with Mr Samingan to arrange. I find that evidence to be incredible. Mr Dhimi was the sole shareholder and sole director of UKSP. He had only just set it up and he said in the Elavon form that the projected annual revenue was £4 million. It is not credible that someone in his position would cause his company to employ 30 people and not even know where those people were working. Moreover, according to the Elavon form, he did know at the time where UKSP was trading from. He was unable to explain why he said that this was 127 Gloucester Road if that information was incorrect. Mr Dhimi did not identify anywhere else where UKSP could have been trading from and he confirmed that it was not trading from Mocatta House.

I find that, when it started trading, UKSP did so from 127 Gloucester Road. It was unnecessary for the purposes of Issue 5 to explore how long UKSP remained at 127 Gloucester Road or where it subsequently went to and so I do not address those issues. I should also record that I do not find that all 30 of the employees operated from 127 Gloucester Road, as there were only 10 work stations in the property.

The claimants contend that UKSP simply took over Apex Assure’s workforce. UKSP and Mr Dhimi deny that. However, they do not deny that at least some of the individuals who started working for UKSP were former employees of Apex Assure.

UKSP’s bank statements show that on 30 June 2021 it paid sums to 28 individuals (excluding Mr Dhimi himself) and on 1 July it paid sums to 2 more individuals, all with the reference “June wages”, “June commission” or “June”. UKSP continued to make monthly payments to them (or most of them) thereafter. The amounts paid to each individual in the months after June 2021 did not always remain constant, but they were all consistent with being monthly wages and/or commission.

Of the 30 individuals who became employees of UKSP, there is evidence that:

No documents have been disclosed by UKSP or Mr Dhimi which show how these employees were recruited or how their wages were calculated. In those circumstances, I do not regard any differences in what they were paid from one month to the other as being of any significance.

This pattern of taking on 30 employees in one go, rather than building up a workforce, is more consistent with taking over an existing business than with building up a new business from scratch. Mr Dhimi’s evidence that he simply delegated to Mr Samingan the task of recruiting staff for UKSP was not credible. It was simply a device to enable him to say that he did not know where UKSP’s employees came from. Moreover, when he was first asked about this matter, he denied that this was a large recruitment exercise and said that Mr Samingan only recruited three or four people. I find that that was untruthful evidence.

I find that these 30 individuals were treated by UKSP as employees of UKSP with effect from 1 June 2021. Moreover, I find that the arrangements for paying their wages were simply continued from their previous employment by Premier Protect, Apex Assure or SHP, at least to begin with.

Between May and July 2021 UKSP paid a total of £38,274 to Easy4Everyone, which was a company owned and controlled by Mr Ali and which had paid Apex Assure’s employees. Mr Dhimi said in his statement dated 19 January 2024 that he did not recall what the payments to Easy4Everyone related to and that he may have been directed to make these payments by Mr Akayour. At trial, he said that the largest payment, of £25,000, was for some consulting work, which he described as “basic pointers”. I do not accept that evidence. I find that the payments to Easy4Everone were, at least in part, for payroll services which continued from Apex Assure and SHP to UKSP.

The claimants allege that Mr Dhimi had had some contact with Mr Ali before he set up UKSP. Mr Dhimi acknowledged that he met Mr Ali through Mr Akayour. He said that this was during the time when he was setting up UKSP.

The claimants also alleged, and UKSP and Mr Dhimi denied, that Mr Ali had some involvement in UKSP’s business. I find that he did:

Given the dearth of disclosure, I make no finding as to the precise extent of Mr Ali’s involvement in UKSP’s business.

As I have said, UKSP and Mr Dhimi admit that Mr Akayour had some involvement in setting up UKSP’s business, but Mr Dhimi said that his involvement was limited to providing consulting services, which Mr Dhimi described as “a few basic pointers”. There is no documentary evidence of the alleged provision of consulting services. One instance of Mr Akayour’s involvement in the establishment of UKSP is that on 25 February 2021 he paid UKSP’s data protection fee from his personal credit card.

The context for considering the issue of Mr Akayour’s involvement with UKSP is that, when the business was first set up in 2019, both Premier Protect and PRO were his companies and, as I have found, Mr Akayour continued to play a significant role in the management of Apex Assure as it took over the business of Premier Protect. Moreover, the relationship between Premier Protect and Apex Assure on the one hand and PRO on the other hand was not simply an arm’s length relationship:

Moreover:

Mr Dhimi said that Mr Akayour was a friend whom he had known since 2017 and that in 2021 they were speaking quite regularly. A photograph on Mr Akayour’s Instagram account dated 15 April 2020 shows Mr Dhimi and others in football kit. Mr Dhimi said that this photograph was taken in Morocco, which was where PRO had a call centre.

Mr Dhimi acknowledged in his witness statement that PRO was recommended to him by Mr Akayour. It is also acknowledged that UKSP retained PRO in April and May 2021. PRO was a company of which Mr Akayour was a director. After PRO, UKSP retained Domestic Guardian, which was another company controlled by Mr Akayour. Another of Mr Akayour’s businesses, Hi5, was making calls on UKSP’s behalf later in 2021.

However, Mr Dhimi denied knowing of Mr Akayour’s relationship with PRO, although he did not say who he thought controlled PRO if it was not Mr Akayour. A number of documents were put to Mr Dhimi which it was suggested showed that he knew of Mr Akayour’s relationship with PRO:

Retaining a call centre or call centres was a vital part of the business which Mr Dhimi set up in 2021. One measure of the importance of call centres is to be found in UKSP’s accounts for the year ending 28 February 2023, when its total turnover was £2,128,480 and the amount spent on advertising, which was accepted to be largely, if not exclusively, the amount paid to call centres, was £1,318,978, or 62% of the total. It is inherently improbable that a businessman such as Mr Dhimi would not find out who controlled a business which was so important to his business and it is equally improbable that Mr Akayour would conceal his involvement in PRO from Mr Dhimi. No reason for him to do so was suggested. The documents relied on by the claimants are by no means conclusive in themselves, but they provide some support for the claimants’ case.

Against that background, and having regard to my findings about Mr Dhimi’s credibility, I do not accept Mr Dhimi’s assertion that he did not know of Mr Akayour’s involvement with PRO. I find that he was aware that PRO, Domestic Guardian and Hi5 were Mr Akayour’s companies.

For some time, UKSP made use of call centres which had been used by Premier Protect and Apex Assure and/or which were controlled by Mr Akayour. The call centres used by UKSP in 2021 included:

The other call centres used by UKSP in 2021 were UKMC, which did not contact Mr Dhimi until 20 May 2021, and Rumpaze Solutions, which was not engaged until July 2021. UKSP called no evidence as to why it changed the call centres which it used. UKSP and Mr Dhimi placed particular stress on the role played by UKMC, but it was not alleged that UKMC became UKSP’s only direct agent until some time in 2022.

I will deal in more detail with the call scripts later, but the call scripts which UKSP relied on as different from those used by Premier Protect and Apex Assure were not produced until November 2021 or later.

Likewise, I will deal later with the evidence of what was actually said in customer calls, but I accept the claimants’ submission that there was no marked change between what was said in Premier Protect or Apex Assure calls and what was said in UKSP calls.

The UKSP customer welcome letter was identical to the Apex Assure letter and I accept the claimants’ submission that UKSP’s welcome letter was simply copied from Apex Assure’s welcome letter and that assertions and evidence to the contrary from UKSP and Mr Dhimi were false. Likewise, UKSP’s terms and conditions were based on Apex Assure’s terms and conditions. UKSP retained Webpost to send out its customer welcome letters, just as Premier Protect and Apex Assure had done.

In my judgment, in the light of all of this evidence and of my findings, the answer to issue 5 is clearly that UKSP was established to continue the business and operations previously conducted by Premier Protect and Apex Assure.

Issue 1 is:

The evidence relevant to this issue comes from the small number of call recordings disclosed by the defendants, the call scripts found on the Trading Standards raid or disclosed by UKSP and the recordings of the calls made by customers to the claimants.

The court directed that, as against Premier Protect and UKSP, this issue be tried by reference to sample groups of customers. There were three sample groups selected by a jointly instructed expert:

The claimants alleged in the Amended Particulars of Claim that during a typical sales call some or all of the following misrepresentations were made:

“19.1

The caller represents, either expressly, or impliedly, that the organisation the person is calling from is either (a) the existing provider of the call recipient’s home appliance or consumer electronics cover (“the Provider”), or (b) is otherwise in some way associated with the Provider (“the Association Misrepresentation”). In some of the calls, the caller makes express reference to D&G, Sky or Sky Protect by name;

19.2

The caller represents that the customer’s home appliance (or Sky Protect) cover has expired or is about to expire (“the Expiry Misrepresentation”);

19.3

The caller offers to renew or reinstate the customer’s existing home appliance (or Sky Protect) cover, thereby impliedly representing that the caller is in a position to extend the customer’s cover with the Provider (“the Renewal Misrepresentation”);

19.4

The caller represents impliedly that he has access to the customer’s payment details by implying an existing relationship with the customer (“the Payment Misrepresentation”);

19.5

The caller informs the customer that the customer’s home appliance cover has been cancelled or that the caller is able to effect the cancellation of said plan (“the Cancellation Misrepresentation”); and/or

19.6

The caller informs the customer that he is able to adjust the customer’s current premiums or provide some form of discount on the customer’s plan (“the Price Misrepresentation”).”

The principal alleged misrepresentation was the Association Misrepresentation. The other alleged Fraudulent Misrepresentations were relied on as supporting the Association Misrepresentation. Indeed, not all of them were pleaded as against UKSP. As will be seen, I consider that the other alleged Fraudulent Misrepresentations are best seen as means of bolstering the Association Misrepresentation.

The call recordings which have been disclosed are of limited assistance. They do not include any recordings of the initial customer call made to customers in the sample groups. They are very few in number and no evidence was adduced as to how they were selected. Having said that:

Before considering the call scripts which were available at trial, I note that, based on his experience of investigating several rogue traders and speaking to their employees, Mr Peerless Mountford said that callers who were given a script would not simply read it out, but would embellish it in order to entice the customer to stay on the telephone, in a practice known as “objection marketing”. In the light of that evidence, I have not assumed that any of the call scripts which I was shown captured all of what was said on any individual telephone call.

Mr Akayour attached a very brief call script to his statement dated 3 June 2021. It did not provide for the caller to state where he was calling from. It did provide for the caller to state that the manufacturer’s warranty on the customer’s appliance was showing up as expired. It concluded with the caller saying that “one of our partners, Premier Protect, will be in contact with you shortly to run through the payment.” It was misleading for a person calling on behalf of Premier Protect to describe Premier Protect as “one of our partners”.

The call scripts found during the Trading Standards raid included call scripts which were headed “Apex Assure script” and others which were headed “Service Home Plan script”, although some of the scripts headed “Apex Assure script” had the caller saying that they were at Service Home Plan. None of these scripts referred expressly to the claimants. Several of the scripts for the initial customer call say that the cover on the customer’s appliance has expired and/or ask whether the payment will be coming from the customer’s usual visa account.

One script for a follow-up customer call contains a statement that, “This is a new plan and we are not associated with any other companies such as Domestic and General, Home Sheild and Curry's.” However, this statement was to be made after payment had been taken from the customer.

Several of these scripts were amended by hand, which suggests that their contents may have changed over time and/or that individuals may have adapted them for themselves.

Several of these scripts assume that the caller has information about the customer, namely: the customer’s name and address; details of the customer’s appliances; and the customer’s credit or debit card number.

The call scripts initially disclosed by UKSP are of little assistance, since the metadata shows that they had been created in September and October 2022, long after UKSP started its business and after UKSP and Mr Dhimi received the letter before action. On the one hand, they do not contain any reference to the claimants, but on the other hand they do not contain any reference to UKSP either. If he followed one script, the caller would say that he was from Kitchen Appliance Cover. If he followed the other script, the caller would not say where he was from.

Another UKSP call script is dated 24 November 2021. Further versions of this script date from 2022 and 2023. It is for a follow-up customer call. It does not contain any misrepresentations, it gives UKSP’s name and it contains the following statements:

“UK Service Plan is its own entity and is not affiliated with any other company.

This will be set up as a brand new policy and not a renewal.”

These statements, however, were to be made after payment had been taken from the customer.

Premier Protect, Apex Assure and Home Protect did not disclose any communication with call centres about scripts, nor was any evidence served by them on the subject of what, if anything, was said to call centres about which scripts to follow and how to ensure that they would be followed.

Despite being ordered on 15 December 2023 to disclose all “communications with third party agents in respect of the use of call scripts by such agents and/or the conduct of sales calls on behalf of [UKSP]”, UKSP and Mr Dhimi disclosed no such communications.

Mr Dhimi relied on the fact that UKSP appointed Ms Puglianini as a full-time compliance officer. That, however, was in July 2022, over a year after UKSP took over the business previously carried on by Premier Protect and Apex Assure. Moreover, she was not called to give evidence and the documents disclosed in relation to her call monitoring activities solely related to follow-up customer calls and not to initial customer calls.

The claimants disclosed 344 transcripts of recordings of calls to the claimants made by customers in the three sample lists and 42 more transcripts of recordings of calls from other customers complaining about Apex Assure. The Claimants’ counsel prepared a misrepresentation schedule setting out the alleged misrepresentations reported in these calls. As detailed in that schedule, the claimants contend that misrepresentations were made to a total of 205 customers, made up of 79 in respect of Premier Protect (who called between July 2019 and August 2023), 45 in respect of Apex Assure (who called between December 2020 and January 2022) and 81 in respect of UKSP (who called between June 2021 and October 2022). There are three annexes to the misrepresentation schedule, one for Premier Protect, one for Apex Assure and one for UKSP. I will refer to the customers in each schedule by their customer number, as “PP1”, “AA1” or “UKSP1” etc.

The claimants also relied on extracts from two calls relating to Home Protect, one dated 12 September 2019 and one dated 12 January 2021.

I have read all of the transcripts of the calls referred to in the misrepresentation schedule. In addition to providing evidence of what was said to the claimants’ customers, they also provide some evidence of the manner in which the customer calls were conducted. For instance:

A common theme of many of the recordings relied on by the claimants is that their customers had received unsolicited calls from someone who either said that they were from Domestic & General or said that they were from a company associated with Domestic and General or created the impression, including by means of one or more of the other alleged Fraudulent Misrepresentations, that they were from Domestic & General or a company associated with Domestic and General.

As for examples of representations that the caller was from the claimants:

As for examples of representations that the caller was from an organisation associated with the claimants:

Other customers said that the caller implied that they were from Domestic and General or were working for Domestic and General or were associated with Domestic and General.

The effect of the Association Misrepresentation was to make the customers significantly more receptive to the sales pitch being made on behalf of the defendant traders. For instance, customers said to the claimants:

Notwithstanding Ms Puglianini’s appointment in July 2022, the UKSP annex to the misrepresentation schedule included a number of complaints about the Association Misrepresentation in the period from August to October 2022.

It appears from the transcripts, taken as a whole, that the other alleged misrepresentations are best seen as means of bolstering the Association Misrepresentation. It is clear that the callers were assisted in creating the impression that they were from the claimants, or from an organisation associated with the claimants, by the amount of information which they had about the customers, which included: the customer’s name and address; details of the customer’s appliances; the amount which the customer was paying by monthly direct debit to the claimants; and/or at least part of the customer’s credit or debit card number. There was no evidence before me as to how the call centres had acquired this information, but the use of it gave the impression that they had obtained it from the claimants. For instance:

“When I asked how I could be sure that the call and the offer were genuine she, not unreasonably, asked how, otherwise, would she know the details of the goods covered, the DD figures and the renewal dates.” (AA7 & AA26)

In that context, the significance of the alleged Expiry and Renewal Misrepresentations was that they gave the impression that the caller had information from the claimants about the customer’s Plan. As for examples of the alleged Expiry Misrepresentation:

As for examples of the alleged Renewal Misrepresentation:

I accept Mr Currie’s submission that the word “renewal” is ambiguous. In the strict sense, a contract such as a Plan can only be renewed with the original contractor, but common usage is not so strict: for example, many people would say that they had renewed their car insurance, whether they had remained with the same insurer or moved to a new one.

As for the alleged Payment Misrepresentation, it appears that the caller often did have at least part of the customer’s credit or debit card number. The fact that the caller had that information lent support to the Association Misrepresentation, since it implied that the caller had acquired that information legitimately from the claimants.

There were very few examples of the alleged Cancellation Misrepresentation. For instance, “Now he said he will cancel this policy.” (UKSP15)

As for the alleged Price Misrepresentation, the principal significance of this was that the caller again gave the impression that he had legitimate access to information about the customer and his Plan, as a result of which the caller was offering a discount. For instance:

The mere fact that a caller offered a discount to a customer was again potentially ambiguous, since it could be interpreted as meaning that the customer was being offered a discount from what the customer was already paying or from what the defendant trader would otherwise have offered to charge the customer.

Some customers said that they were told that their direct debit in favour of the claimants had been, or would be, cancelled or that they would be contacted by their bank about cancelling their direct debit. For instance:

More often, however, customers reported that the caller told them to cancel their direct debit or their Plan themselves. For example:

Paragraph 12.2 of UKSP’s and Mr Dhimi’s defence, which is dated 7 December 2022, was in the following terms:

“The Ninth Defendant engages marketing agents for the purposes of:

12.2.1

identifying potential new customers (“Origination Calls”); and

12.2.2

re-contacting the potential new customers with a view to entering into the necessary arrangements, including payment, for the purchase of a service plan (“Warm Leads”).”

That was a positive assertion that the relevant call centres were retained by UKSP both to make initial customer calls and to make follow-up customer calls, i.e. that the call centres were acting as UKSP’s agents when making both types of call. The same was true of what Mr Dhimi said in paragraph 18 of his first witness statement, dated 23 December 2023:

“In order to secure new customers, UKSP engages third party agencies to obtain new business. The agencies do this by contacting individuals (“Origination Call”) to identify potential customers (“Warm Lead”) and then following up on Warm Leads to attempt to secure the customers’ business. UKSP outsources its marketing activities, including Origination Calls, to an external marketing company, UK Market Communications Ltd (“UKMC”), which outsources the Origination Calls to various external call centres engaged directly by UKMC. …”

However, Mr Dhimi changed his position in his second witness statement, dated 19 January 2024, in which he said that UKMC generated warm leads itself, thereby suggesting that UKMC or its agents were not making the “origination calls” as agent for UKSP. He claimed in his evidence at trial that in UKSP’s case the call centre making the initial customer calls was not acting on behalf of UKSP, but was merely seeking to obtain a lead which could then be sold to UKSP or to another company. In support of this claim, he said that no price was quoted to the customer until the follow-up customer call.

I do not accept this evidence. It is contradicted by UKSP’s own scripts for the initial customer call (in which prices are quoted), by UKSP’s scripts for follow-up customer calls (which proceed on the basis that the price had already been agreed in the initial customer call) and by the recordings of UKSP’s customers’ calls to the claimant: many of those customers referred to prices being quoted in the initial customer call and many referred to UKSP being named, albeit in conjunction with the Association Misrepresentation. I find that the call centres were acting as UKSP’s agents when they made both initial and follow-up customer calls.

I accept the claimants’ submission that the recordings of customers’ calls to the claimants provide the best evidence of what was actually said to those customers. I acknowledge that they are by no means a perfect record of what was said to the customers, but I do not consider that they can simply be dismissed as the product of confusion on the part of the customers.

I find that that the calls made by or on behalf of Premier Protect, Apex Assure and UKSP to prospective customers regularly involved making the Association Misrepresentation, which was often bolstered by one or more of the other alleged Fraudulent Misrepresentations. As to the other alleged Fraudulent Misrepresentations:

I also make the same finding in relation to Home Protect. The amount of business done by Home Protect was considerably less than that done by the other defendant traders, but it was controlled by Mr Akayour and there was nothing to suggest that it operated any differently from Premier Protect or Apex Assure. Moreover, the two calls relied on by the claimants in relation to Home Protect included complaints about the Association Misrepresentation.

Issue 2.1 is:

No caller who made the Association Representation, nor anyone who authorised it, can have believed that it was true. No basis for contending otherwise was identified.

Issue 2.2 is:

The claimants contended that:

In their defences, the defendant traders denied that any misrepresentations made were within the actual authority of the relevant call centres. Premier Protect relied on an outsourcing agreement with C3 Marketing dated 19 July 2019. Apex Assure relied on an outsourcing agreement with C3 Marketing dated 12 November 2020.

UKSP relied on two versions of an “Introducer Agreement – Compliance” (“the compliance agreement”) with UKMC, dated 1 May 2021 and 14 October 2022. UKSP also contended that UKMC or its agents were not acting as agents for UKSP when they made initial customer calls, but I have already rejected that claim.

Paragraph 3 of the compliance agreement provided that UKMC must maintain processes for identifying and managing mis-selling and misleading statements and that misleading statements should be identified and corrected. Paragraph 4 of the compliance agreement provided that UKMC was responsible for the compliance of third party contractors as if they were employees of UKMC.

Mr Khan’s evidence was that he was only a director of UKSP for a brief period and that he never played any active role in relation to UKSP.

It is clear that the Association Misrepresentations made to customers on behalf of the defendant traders were within the scope of the ostensible authority of the callers. The agreements relied on by the defendants do not displace the principles set out in the authorities relied on by the claimants.

As to actual authority, if the defendants, or any of them, had expressly given actual authority to any of the call centres to use fraudulent misrepresentations to sell Plans, it is not to be expected that any such authority would be set out in writing. Moreover, it is entirely possible that the parties would in such circumstances create documents, such as the compliance agreement between UKSP and UKMC, which served to conceal the true position.

It follows that it is unsurprising that the claimants’ case is based on inviting me to draw inferences from the facts of the case as a whole, including the evidence as to the Association Misrepresentation itself, the relationships between the defendants and others, the defendants’ conduct of this litigation, especially in relation to disclosure, and the false evidence given by Mr Akayour, Mr Ali and Mr Dhimi. Having said that, I recognise that inferences of the kind which the claimants invite me to draw are not to be drawn lightly.

I will address the issue of actual authority in relation to Mr Akayour and his companies, Mr Ali and his company and Mr Dhimi and his company.

Mr Akayour has been debarred from defending himself, but it remains the case that the claimants have to prove their case against him.

Mr Akayour set up the Premier Protect business in Brighton in 2019 and was also a director of the PRO call centre business in Morocco which made some of the customer calls on behalf of Premier Protect. Consequently, he was particularly well-placed to know and to influence what was being said on Premier Protect’s behalf in customer calls made by PRO. I note that in his evidence he has given no account of what, if any, steps he took in his capacity as director of PRO to direct or monitor what PRO’s employees were saying in customer calls on Premier Protect’s behalf. Instead, he sought to mislead by distancing himself from PRO.

I note that Mr Macdonald sent an email to Mr Akayour on 25 June 2020 with the subject heading “UK PAY” in which he said “Below is UK pay” and then listed what I find are the amounts paid to Premier Protect’s employees for the month of June 2020. What is significant about the use of the phrase “UK Pay” is that it is an indication that Mr Akayour’s business was regarded as a single, multinational business, in which there were UK employees and also employees in other jurisdictions. There is no evidence that Premier Protect had employees outside the United Kingdom, but PRO had employees in Morocco. I find that Mr Akayour regarded these different companies as part of the same enterprise.

I have found that the Association Misrepresentation was regularly made in customer calls on behalf of Premier Protect. Those calls were made by employees of C3, PRO and Callforce Global. There is no evidence that any of these call centres was saying anything different from any other, save that Mr Ali said in his statement dated 16 April 2023 that it was PRO and Callforce Global, rather than C3 Marketing, who made initial customer calls. The Association Misrepresentation was likely to be made, if at all, in the initial customer calls. I find, therefore, that employees of PRO were regularly making the Association Misrepresentation on behalf of Premier Protect.

In my judgment, there are four possibilities:

The fourth of these possibilities is, in my judgment, inherently the most likely in the circumstances of this case. Moreover, it is supported by Mr Akayour’s conduct in relation to this litigation, including his considerable reluctance to give disclosure, to the extent of committing contempt of court, and his false and misleading evidence, all of which give rise to the inference that giving full and proper disclosure and accurate evidence would have assisted the claimants’ case.

The outsourcing agreement relied on by Premier Protect does not assist Mr Akayour or his companies. It is generic in nature. It makes reference to a number of other documents, such as “Statements of Work”, “Designated Service Levels”, “Key Measurements” and “Critical Service Levels”, which, if they ever existed, have not been disclosed. It assumes a dialogue between Premier Protect and C3 Marketing, both in relation to those other documents and, for instance, in relation to C3 Marketing’s obligation under the outsourcing agreement to notify Premier Protect of training programmes and sessions for C3 Marketing’s staff. Premier Protect has not disclosed any documents evidencing any such dialogue.

I find that Mr Akayour, on behalf of Premier Protect, expressly authorised PRO and its staff to make the Association Misrepresentation in customer calls made on behalf of Premier Protect. I make the same finding in respect of C3 Marketing and Callforce Global, since there was no evidence to suggest that Premier Protect treated those call centres differently from PRO. I also find that the authority given by Premier Protect was given by Home Protect, since there is no evidence that Mr Akayour treated his two companies any differently.

Before Apex Assure took over the business, Mr Ali was involved with Premier Protect’s business. This appears from the following:

It was acknowledged in the defence of the first to fifth defendants that Apex Assure was the successor business to Premier Protect. I have already noted what Mr Ali said in his response to a letter dated 8 January 2024 about Premier Protect managing Apex Assure. I take this to be an allegation that Mr Ali continued to act under the direction of Mr Akayour during the period when Apex Assure was doing business with customers. Since Mr Akayour was the individual who had set up the Premier Protect business and who had, no doubt, whether directly or indirectly, invited and encouraged Mr Ali to carry it on through Apex Assure, it is entirely credible, and I find, that Premier Protect, through the person of Mr Akayour and/or others acting on his behalf, directed the management of Apex Assure when it was trading.

In those circumstances, I find that Apex Assure authorised the making of the Association Misrepresentation, since Apex Assure was managed by Mr Akayour, who had authorised the making of the Association Misrepresentation on behalf of Premier Protect and continued to authorise it on behalf of Apex Assure. I will deal later with the issue as to the extent of Mr Ali’s knowledge of and involvement in this way of doing business.

Having regard to all of the evidence which I considered in relation to issue 5, I have no doubt that Mr Dhimi was fully aware of the nature of the business which he was taking over in 2021, including the fact that call centres made use of the Association Misrepresentation to win business. Although he was later to make changes, such as the appointment of a compliance officer, Mr Dhimi initially took over the business and conducted it as it had been conducted by Premier Protect, Home Protect and Apex Assure. Accordingly, I find that Mr Dhimi and UKSP authorised the making of the Association Misrepresentation on behalf of UKSP.

By the end of the trial, the claimants’ case against Mr Khan was a limited one. It was that, once he became a director of UKSP, he became privy to the deceptive sales practices employed by UKSP and, while remaining a director, he failed to use his position as a director to take any steps to stop that practice.

Mr Khan was appointed as a director of UKSP on 15 June 2022. In his defence he said that he resigned on 16 June 2022. In his witness statement he said that he worked as a delivery driver and that a friend of his (whom he identified at trial as Mr Chhabu) had suggested that he could earn about £500 per month for acting as a director of UKSP, but that it soon became apparent that the level of work which was expected of him was greater than he expected and he asked Mr Dhimi to remove him. He said that he only signed a few documents and that he only spoke to Mr Dhimi a few times.

Documents filed with Companies House record Mr Khan’s appointment as a director of UKSP on 15 June 2022 and that he ceased to be a director with effect from 16 June 2022, but this latter document was not filed until 21 October 2022, after the letter before action was sent to Mr Khan on 8 September 2022.

The claimants contend that I can infer that Mr Khan was actively involved in UKSP’s business from 15 June 2022 until after he received the letter of claim and that he learnt of and did nothing to stop the practice of using the Association Misrepresentation to obtain business. The claimants rely, in particular, on:

Mr Khan was a delivery driver living in Preston in Lancashire. Mr Dhimi had operated UKSP as a sole director for a year before Mr Khan was appointed as a director. It is unclear why Mr Khan was appointed as a director of UKSP. There are no documents to indicate that he did anything as director except to sign and send a single resolution. That may be a result of disclosure failings, but it is also consistent with the fact that Mr Dhimi did not need Mr Khan in order to run UKSP.

I accept that there were some discrepancies in Mr Khan’s evidence and a number of unanswered questions, especially given the scarcity of documents. I was particularly sceptical of his claim that he did not send the email dated 23 June 2022. However, having considered his evidence as a whole, and the manner in which he gave evidence, I have concluded that I would not be justified in drawing the inferences which the claimants invited me to draw.

Having reached that conclusion in relation to Mr Khan, I need not say much about the application which Mr Coulter made at the start of the trial for an order striking out the claim against Mr Khan on the basis that the claim against him was inadequately pleaded and unsupported by evidence. I declined to strike out the claim and said that I would give my reasons later.

I accepted Mr Coulter’s submission that the mere fact of Mr Khan’s being a director of UKSP did not make him liable to the claimants. As for the lack of particulars in the claimants’ pleaded case and the absence of documentary evidence, that had to be seen in the context of the paucity of disclosure by the defendants generally in this case. I have already noted that it is common in cases of this nature that the claimants’ case involves inviting the court to draw inferences and that, at the end of the day, is what the claimants did in relation to Mr Khan. Moreover, there was evidence, as I have noted, which suggested that Mr Khan himself had given an inaccurate account of his time as director of UKSP, which was itself an indication that the issue of what he actually did merited consideration at trial.

Issue 2.3 is:

In the light of the evidence and my findings on issue 2.2, I find that Mr Akayour, acting on behalf of Premier Protect and Home Protect, encouraged their agents to make the Association Misrepresentation.

Similarly, in the light of the evidence and my findings on issue 2.2, I find that Mr Akayour, acting on behalf of Apex Assure, encouraged Apex Assure’s agents to make the Association Misrepresentation.

I have considered carefully the position of Mr Ali. In correspondence, he has sought to minimise his role in relation to Premier Protect and Apex Assure. For instance, he has claimed that Apex Assure never received any money and that he never received any money from Apex Assure. However, he was being paid £4,000 per month by Premier Protect in June 2021 and was clearly playing an important role in Premier Protect’s operations, which continued when Apex Assure succeeded to Premier Protect’s business.

Given his directorship of PRO, it may be that Mr Akayour had closer contact with the call centres than Mr Ali. On the other hand, it was Mr Ali who signed Apex Assure’s outsourcing agreement with C3 Marketing on 12 November 2020. Moreover, Mr Ali appears to have been in closer contact with Apex Assure’s employees in Brighton than Mr Akayour. Mr Ali was present at 127 Gloucester Road when the Trading Standards raid took place. I have already found that customer calls were being made from 127 Gloucester Road. Mr Ali was involved in managing that operation.

In those circumstances, and having regard to Mr Ali’s conduct of this action, which included failing to comply with orders and being found to be in contempt of court, I have concluded that I should draw the inference that Mr Ali encouraged the use of the Association Misrepresentation.

For substantially the same reasons as I gave in relation to issue 2.2, I find that Mr Dhimi, on behalf of UKSP, encouraged the call centres used by UKSP to make the Association Misrepresentation.

Issue 2.4 is:

Lord Nicholls said as follows in paragraphs 164 to 166 of his judgment in OBG Limited v Allan [2008] 1 AC 1 (“OBG v Allan”):

“164.

I turn next, and more shortly, to the other key ingredient of this tort: the defendant’s intention to harm the claimant. A defendant may intend to harm the claimant’s business either as an end in itself or as a means to an end. A defendant may intend to harm the claimant as an end in itself where, for instance, he has a grudge against the claimant. More usually a defendant intentionally inflicts harm on a claimant’s business as a means to an end. He inflicts damage as the means whereby to protect or promote his own economic interests.

165.

Intentional harm inflicted against a claimant in either of these circumstances satisfies the mental ingredient of this tort. This is so even if the defendant does not wish to harm the claimant, in the sense that he would prefer that the claimant were not standing in his way.

166.

Lesser states of mind do not suffice. A high degree of blameworthiness is called for, because intention serves as the factor which justifies imposing liability on the defendant for loss caused by a wrong otherwise not actionable by the claimant against the defendant. The defendant’s conduct in relation to the loss must be deliberate. In particular, a defendant’s foresight that his unlawful conduct may or will probably damage the claimant cannot be equated with intention for this purpose. The defendant must intend to injure the claimant. This intent must be a cause of the defendant’s conduct, in the words of Cooke J in Van Camp Chocolates Ltd v Aulsebrooks Ltd [1984] 1 NZLR 354, 360. The majority of the Court of Appeal fell into error on this point in the interlocutory case of Miller v Bassey [1994] EMLR 44. Miss Bassey did not breach her recording contract with the intention of thereby injuring any of the plaintiffs.

Lord Nicholls added the following in paragraph 167 of his judgment in OBG v Allan:

“I add one explanatory gloss to the above. Take a case where a defendant seeks to advance his own business by pursuing a course of conduct which he knows will, in the very nature of things, necessarily be injurious to the claimant. In other words, a case where loss to the claimant is the obverse side of the coin from gain to the defendant. The defendant’s gain and the claimant’s loss are, to the defendant's knowledge, inseparably linked. The defendant cannot obtain the one without bringing about the other. If the defendant goes ahead in such a case in order to obtain the gain he seeks, his state of mind will satisfy the mental ingredient of the unlawful interference tort. This accords with the approach adopted by Lord Sumner in Sorrell v Smith [1925] AC 700, 742:

“When the whole object of the defendants’ action is to capture the plaintiff’s business, their gain must be his loss. How stands the matter then? The difference disappears. The defendants’ success is the plaintiff’s extinction, and they cannot seek the one without ensuing the other.””

In paragraphs 479 to 522 of his judgment in E D & F Man Capital Markets Limited v Come Harvest Holdings Limited [2022] EWHC 229 (Comm) (“E D & F Man”), Calver J considered and rejected the submission that it was a requirement of the tort that the defendants must have directed their actions towards the specific claimant, rather than intending to benefit themselves at the expense of a class of persons of which the claimant was one. (That case concerned a conspiracy to use unlawful means, but the intention required in such a case is the same as in a case of causing loss by unlawful means: see paragraph 161 of Bryan J’s judgment in Lakatamia Shipping Co Limited v Su [2023] EWHC 1874 (Comm).)

The claimants put their case on the basis that when Mr Akayour, Mr Ali and Mr Dhimi encouraged the strategy of using of the Association Misrepresentation by or on behalf of the defendant traders, they intended to cause loss to the claimants. By contrast, Mr Currie submitted that it was also necessary to consider the intention of the individual callers, including whether their intentions could be attributed to the defendant traders.

I do not consider that it is necessary for the claimants to prove the intention of each individual caller in relation to each individual call. Having said that, it is clear from the transcripts of the customer calls listed in the misrepresentation schedule that the caller’s intention in making the Association Misrepresentation was to induce the customer to take out a Plan with the relevant defendant trader and, if necessary to achieve that objective, to induce the customer to cancel his Plan with the claimants. This appears most clearly from those cases in which the caller told the customer to cancel his direct debit with the claimants.

There is no doubt that the relevant defendants’ intention was to win business from the claimants’ customers. The principal issue in relation to Issue 2.4 is whether, adopting the words of Lord Nicholls in paragraph 164 of OBG v Allan, the defendants intentionally inflicted harm on the claimants’ business as a means of promoting their own economic interests. In considering that issue, it is relevant to consider both what was said to the claimants’ customers, as appears from the transcripts of the calls listed in the misrepresentation schedule, and what those customers subsequently did. A source of information about the outcome of calls made to customers is to be found in the UKSP cancellation schedule.

This was prepared by the claimants’ counsel after looking at the evidence relating to the members of the sample group of 345 UKSP Common Customers and seeking to identify those cases in which one of the claimants’ customers cancelled (or did not renew) a Plan with the claimants after taking out a Plan with UKSP in respect of the same appliance or appliances. For various reasons to do with the quality of the data available, the claimants’ counsel have identified three categories of case:

Thus, out of 345 customers in the UKSP sample group, the claimants contend that the available evidence shows that 130 appliances were subject to Plans with the claimants which were cancelled after the relevant customer took out a Plan with UKSP.

The UKSP cancellation schedule shows that:

The data disclosed by Premier Protect and Apex Assure does not permit a similar analysis in their cases. However, I infer that the pattern was the same with calls made on behalf of Premier Protect, Home Protect and Apex Assure, since there is no evidence that there was any material difference between their manner of doing business and that of UKSP.

By no means every call made on behalf of a defendant trader resulted in the customer taking out a Plan with the relevant defendant. However, the fact that some calls failed to achieve their objective does not shed light on the question of what the intention behind the calls was. The same can be said of those calls which resulted in the customer taking out a Plan with the relevant defendant trader, only for the customer to cancel the Plan and/or his payment thereafter when he realised that the defendant trader was not associated with the claimants.

I have already explained that calls were made to the claimants’ customers by representatives of the defendant traders who:

Given the decision in E D & F Man, there is no relevant distinction for present purposes between these different types of call.

A different distinction can be drawn between calls which were made:

This latter category of calls cannot have resulted in loss to the claimants, but I have no reason to believe that it was a large category. The distinction between these two types of call is not significant for the purposes of the issue of intention.

Another distinction, which is potentially more significant, concerns those calls in which the defendant trader was successful in selling a Plan to an existing customer of the claimants:

It is inherently unlikely that a customer who realised the true position would choose to have two Plans in place for the same appliance at the same time. On the other hand, a customer who had been deceived by the Association Misrepresentation may well not have appreciated the true position and, as a result, may not have cancelled their Plan with the claimants, either at all or until long after they had taken out a Plan with one of the defendant traders. Nevertheless, having regard to the contents of the UKSP cancellation schedule, it would be an exaggeration to say that every customer who took out a Plan with one of the defendant traders cancelled his Plan with the claimants as a result.

This latter consideration gives rise to the question whether, adapting the words used by Lord Nicholls in paragraph 166 of his judgment in OBG v Allan, the state of mind of the relevant defendants was that they foresaw that their unlawful conduct might, or would probably, damage the claimants, a state of mind which cannot be equated with intention for this purpose. I have given careful consideration to that possibility, but I have concluded that the appropriate inference to draw, having regard to all of the evidence, including taking account of their conduct of this litigation and the false evidence which they have given, is that Mr Akayour, Mr Ali and Mr Dhimi each intended to cause harm to the claimants as a means of winning business for their companies.

This intention can be seen in one or both of two ways. Looking at each defendant trader’s conduct as a whole, Mr Akayour, Mr Ali and Mr Dhimi must have appreciated that it was inevitable that the claimants would lose a substantial amount of business as a result of that conduct, even if some customers retained their Plans with the claimants after they took out Plans with one of the defendant traders.

Alternatively, looking at the calls made to individual customers, and having regard, in particular, to those cases in which the caller told the customer to cancel his direct debit with the claimants, which are clear instances of the defendant traders seeking to cause loss to the claimants, I have already found that that the caller’s intention in making the Association Misrepresentation was to induce the customer to take out a Plan with the relevant defendant trader and, if necessary to achieve that objective, to induce the customer to cancel his Plan with the claimants. I see no reason to doubt that that intention was shared by Mr Akayour, Mr Ali and Mr Dhimi when they encouraged the use of the Association Misrepresentation in order to win business from the claimants’ customers.

Issue 3 is:

The elements of the tort of causing loss by unlawful means are set out as follows in Clerk & Lindsell on Torts, 23rd ed (2020) at para 23.78:

“(i)

an intention to cause loss to the claimant; (ii) use of “unlawful means” against a third party; and (iii) interference with that third party’s freedom to deal with the claimant.”

I will consider each of these elements in turn

I have already found, in the context of Issue 2.4, that there was an intention to cause loss to the claimants, or, at least, to the customer’s existing Plan provider, which in many cases, as was to be expected given their market share, was one of the claimants.

In paragraph 49 of his judgment in OBG v Allan, Lord Hoffmann said as follows:

“In my opinion, and subject to one qualification, acts against a third party count as unlawful means only if they are actionable by that third party. The qualification is that they will also be unlawful means if the only reason why they are not actionable is because the third party has suffered no loss. …”

The alleged unlawful means in the present case was the tort of deceit. As to that, Lord Clarke said as follows in paragraph 18 of his judgment in Hayward v Zurich Insurance Company [2017] A.C. 142:

“Subject to one point, the ingredients of a claim for deceit based upon an alleged fraudulent misrepresentation are not in dispute. It must be shown that the defendant made a materially false representation which was intended to, and did, induce the representee to act to its detriment. …”

In the present case, I have already found that, in the course of customer calls, the defendant traders’ agents regularly made a false representation which was intended to induce customers to act by taking out Plans with the defendant traders.

I find that, in many cases, the false representation had the intended effect, in that customers of the claimants took out Plans with the defendant traders. This can be seen in many of the transcripts referred to in the misrepresentation schedule. Given what Lord Hoffmann said in paragraph 49 of his judgment in OBG v Allan, it is unnecessary for present purposes to consider whether this caused loss to the customers. It follows that the defendants used “unlawful means” against the customers.

The third element of the tort of causing loss by unlawful means was stated by Lord Hoffmann in paragraph 51 of his judgment in OBG v Allan, when he said as follows:

“Unlawful means therefore consists of acts intended to cause loss to the claimant by interfering with the freedom of a third party in a way which is unlawful as against that third party and which is intended to cause loss to the claimant. It does not in my opinion include acts which may be unlawful against a third party but which do not affect his freedom to deal with the claimant.”

The second sentence of this paragraph sets out the third element of the tort of causing loss by unlawful means. In Secretary of State for Health v Servier Laboratories Ltd [2022] AC 959 the Supreme Court rejected a submission that this third element was not an element of the tort of causing loss by unlawful means.

There was considerable argument in closing submissions whether the Association Misrepresentation affected customers’ freedom to deal with the claimants. Mr Goodfellow submitted that the customers’ freedom to deal with the claimants was affected at the time when they decided to cancel their Plan with the claimants. Mr Currie submitted that, once they discovered that they had two Plans covering the same appliance, the customers were free to chose which Plan to cancel.

In paragraphs 52 to 54 of his judgment in OBG v Allan, Lord Hoffmann referred to two authorities which illustrate the application of this third requirement, namely RCA Corpn v Pollard [1983] Ch 135 and Isaac Oren v Red Box Toy Factory Ltd [1999] FSR 785. However, it was not suggested that either of those authorities was particularly helpful in relation to the application of this third requirement to the facts of the present case.

Mr Goodfellow referred to two other authorities, the first of which was Costa v Dissociadid Ltd [2022] EWHC 1934 (IPEC). In that case, Mr Costa knowingly made a false representation to YouTube, which led YouTube to take down some of Dissociadid Limited’s videos from Dissociadid Limited’s channel on YouTube’s website. HHJ Hacon said as follows in paragraph 136 of his judgment:

“Before 13 March 2021 YouTube’s relationship with the defendants was as host to the Dissociadid channel and to the videos on that channel. Mr Costa’s continuing representation after that date that the defendants were using the Disclaimer affected YouTube’s freedom to host some of those videos because of its belief that they infringed Mr Costa’s rights. In part this was because of Mr Costa’s representations that he was joint author of the Disclaimer. It must also have been in part because YouTube believed that the Disclaimer was on the videos themselves, a belief which was probably generated by the manner in which Mr Costa made his takedown requests, discussed below. In any event, Mr Costa’s representation as to the continuing use of the Disclaimer without his permission influenced YouTube’s belief that Mr Costa’s rights were being infringed. Therefore the representation affected YouTube’s freedom to host the relevant videos.”

This is therefore authority for the proposition that a third party’s freedom to contract with the claimant can be interfered with by a misrepresentation made by the defendant to the third party.

The second authority relied on by Mr Goodfellow was Future Investments SA v Federation Internationale de Football Association [2010] EWHC 1019 (Ch), but that case concerned intellectual property rights and is not helpful in the present case.

The third element of the tort of causing loss by unlawful means is that the unlawful means used by the defendant interfered with the third party’s freedom to deal with the claimant. It is not a requirement that the third party’s freedom was completely overborne, merely that it was interfered with.

In many cases, customers cancelled their direct debits in favour of the claimants and/or otherwise cancelled their Plans with the claimants while they were acting in the mistaken belief induced by the Association Misrepresentation. In those cases, I consider that the customers’ freedom to deal with the claimants was interfered with, just as YouTube’s freedom to deal with Dissociadid Limited was interfered with by Mr Costa’s misrepresentation to YouTube. Customers had a choice whether or not to cancel their direct debits or Plans, but their exercise of that choice was impaired by the deception practised on them.

The position is different in the case of customers who cancelled their Plans with the claimants after they had found out that they had been deceived, since the deception was, ex hypothesi, no longer operating on them. They had a choice whether or not to cancel their Plans with the claimants, but that choice was affected by what they had done under the influence of the misrepresentation, i.e. by the fact that they had taken out a Plan with the claimant. Moreover, it can be seen from the transcripts of the calls referred to in the misrepresentation schedule that the overwhelming majority of the Plans offered by the defendant traders were for one, two or three years’ cover in return for a single, up-front payment. By contrast, many of the customers’ Plans with the claimants provided cover in return for monthly payments by direct debit. In many cases, the existence of a Plan with one of the defendant traders for which they had already paid in full will have been seen by the customers as a reason to cancel their Plan with the claimants, when they would not have cancelled that Plan but for the defendants’ deceit.

For example:

There were, of course, other options available to customers who discovered that they had been deceived:

Overall, I consider that customers’ freedom to deal with the claimants was interfered with even after they discovered that they had been deceived.

It follows that, for the reasons which I have given, I find that each of the principal defendants committed the tort of causing loss by unlawful means. Moreover, they did so jointly with one another, since they acted pursuant to a common design, as I will explain in relation to Issue 4.1.

Issue 4.1 is:

According to paragraph 23.108 of Clerk and Lindsell on Torts:

“This form of the tort is committed where two or more persons combine and take action which is unlawful in itself with the intention of causing damage to a claimant who does incur the intended damage.”

I have already found that the principal defendants used unlawful means and that they did so with the intention of causing harm to the claimants. I will explain in the context of Issue 4.3 why I have concluded that they caused loss to the claimants. I deal here with the question whether they entered into a combination, agreement or understanding and took concerted action.

In find that in 2019 Mr Akayour combined with Premier Protect for the purpose of using unlawful means to cause damage to the claimants. It is clear that Mr Akayour was the driving force behind the business which was started in 2019 and encouraged its deceptive manner of doing business. He needed to use a company to carry on the business and that company was initially Premier Protect. Home Protect also joined the combination at some stage, when it started to be used to carry on the business.

Apex Assure and Mr Ali joined the combination when Apex Assure started to be used to continue the business initially conducted by Premier Protect. At that stage, a new company was wanted to carry on the business and Mr Ali, as sole director and shareholder, provided Apex Assure for that purpose. Mr Akayour continued to be involved in the management of Apex Assure’s business. Likewise, UKSP and Mr Dhimi joined the combination when UKSP was first used to continue the business. Mr Akayour was involved in setting up UKSP’s business, Mr Ali continued to be involved in UKSP’s business and Mr Akayour’s companies, PRO and Domestic Guardian, were among the call centres used by UKSP in 2021. Pursuant to this combination, the principal defendants engaged together in the concerted activity of seeking to win business from the claimants’ customers by means of the Association Misrepresentation.

Issue 4.2 is:

I have already found in the context of Issue 2.4 that the principal defendants intended to cause loss to the claimants. I find that they had that intention when the combined with one another.

Issue 4.3 is:

It is clear that the principal defendants have caused loss to the claimants. The clearest evidence of this comes from the UKSP cancellation schedule, which shows that many customers cancelled their Plans with the claimants shortly after taking out Plans with the defendant traders and from the transcripts of calls in which customers said that the defendant traders had told them to cancel their direct debits with the claimants.

I accept also that the conduct of the principal defendants has caused the claimants to expend management time on responding to customer complaints and investigating the conduct of the principal defendants.

Quantification of the claimants’ loss will be a matter for another occasion and so I do not say any more at this stage about the claimants’ loss.

Issue 6 is:

It may be that the claimants will pursue a committal application in respect of the first four defendants and their alleged breach of paragraph 1(a) of the order of 22 January 2021. If so, the standard of proof on such an application will be the criminal standard. For the purposes of Issue 6, I have been asked to consider to the civil standard whether the first to fourth defendants have acted in breach of the order. Nothing which I say on that subject in this judgment is intended to prejudice the first to fourth defendants’ response to a committal application. However, I accept that it is relevant for me to consider Issue 6 as part of the claimants’ case that I can draw inferences from the defendants’ conduct in relation to this litigation.

Paragraph 1(a) of the order of 22 January 2021 provided that, until judgment after trial or further order:

“The First, Second, Third and Fourth Defendants, or any of them, will not, when any of them or any business in which the Defendants have an interest (whether direct or indirect) are seeking to sell cover on home appliances and/or consumer electronics to any prospective customer (“Prospective Customer”):

(i)

represent to the Prospective Customer that they are responsible for the provision of the Prospective Customer’s existing cover or in some way associated with the provider of that cover;

(ii)

do or say anything to suggest or imply any connection or relationship with the Claimants;

(iii)

represent to the Prospective Customer that the Prospective Customer has existing home appliance cover (a “Plan” - as defined hereunder) which has expired or is about to expire, unless such information has first been communicated by the Prospective Customer to the relevant Defendant or via third party;

(iv)

represent to any Prospective Customer that the Prospective Customer is eligible to renew their Plan, or to reinstate previous cover under a Plan, in respect of any existing Plan that the Prospective Customer might have. For the avoidance of doubt, this paragraph 1(a)(iv) does not prevent the relevant Defendant from stating to a Prospective Customer that he/it is proposing a new home appliance cover plan which provides the same or substantially the same level of cover as the warranty or guarantee originally provided by any other person;

(v)

represent to any Prospective Customer that they are in possession of the Prospective Customer’s bank details and/or that they need to confirm or update their records of those details (save that the Defendants are permitted to request bank details from the Prospective Customer during any such call);

(vi)

represent to any Prospective Customer that they have cancelled the Prospective Customer’s Plan;

(vii)

represent to any Prospective Customer that they have changed, are changing, or are capable of changing the customer’s premiums on an existing Plan, whether through the offer of a discount or otherwise howsoever;”

This was subject to paragraph 2, which provided as follows:

“Nothing in paragraph 1(a) above shall prevent the First, Second, Third, and/or Fourth Defendants from stating to Prospective Customers that: ‘The manufacturer’s “warranty”/“guarantee” that you received on purchase “has now”/“may have”/“should have” expired, unless you have purchased an extended warranty’. For the avoidance of doubt, the words in quotations may be used in the alternative.”

The order also contained the following guidance notes:

“b)

A Defendant which is not an individual which is ordered not to do something must not do it itself or by its directors, officers, partners, employees or agents or in any other way; and

c)

The word “Plan” shall mean a service and maintenance plan structured as a contract for services or insurance contract pursuant to which household appliances and/or consumer goods are maintained, repaired or replaced, such plans to include an extended manufacturer’s guarantee or manufacturer’s warranty.”

Given the approach which I have adopted in this judgment to the alleged Fraudulent Misrepresentations, I do not propose to make any findings at this stage in relation to the alleged breaches of sub-paragraphs 1(a)(iii) to (vii) of the order of 22 January 2021. If necessary, these issues can be revisited on a future occasion.

The order of 22 January 2021 was served on the first to fourth defendants on 25 January 2021.

Having regard to the transcript of the customer calls referred to in the misrepresentation schedule, I find that that there are some instances where Premier Protect continued to make the Association Misrepresentation after 22 January 2021 and thereby acted in breach of sub-paragraphs 1(a)(i) and (ii) of the order of 22 January 2021. The following is an example of this conduct:

“I have been conned basically by a company called Premium Direct who claimed to be acting for Domestic & General and took a fee of £195 from me.”

“… and what is the name of the company?”

“Premier Protect.” (PP76, call to the claimants dated 24 February 2021)

There are, however, comparatively few such cases, which no doubt reflects the transfer of the business from Premier Protect to Apex Assure.

I find that there were rather more instances of Apex Assure continuing to make the Association Misrepresentation and therefore acting in breach of the order of 21 January 2021. For instance:

Mr Akayour and Mr Ali did not themselves make the Association Representation, nor did anyone make it on their behalf, rather than on behalf of Premier Protect and Apex Assure. However, I have found that they encouraged the making of the Association Misrepresentation and there is no evidence that they did anything to stop its continuing to be made after service the order of 22 January 2021, save that they appear to have completed the transfer of Premier Protect’s business to Apex Assure,

Issue 7.4 is:

I accept Mr Currie’s submission that the question of what relief should be granted is best considered after the parties have had the opportunity to consider this judgment.

For the reasons set out in this judgment, I find that the principal defendants have committed the torts of causing loss by unlawful means and conspiring to use unlawful means, but that Mr Khan has not committed either tort. I invite the parties to agree the terms of an order to give effect to this judgment and to give directions for the further conduct of these proceedings.

Given the nature of the claimants’ claims, the trial bundle was enormous. I express my gratitude to all solicitors and counsel for their assistance in helping me to navigate through the vast amount of material before me.