One case of shoplifting every minute, nine and a half thousand cases every week, half a million cases every year - now store owners have had enough. Frustrated by criminal laws, they're turning to civil laws. Laws that entitle them to claim damages from thieves who've caused them losses...
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They call it civil recovery. It sounds fair enough, until you realise they're using private companies to pursue those damages, companies who've been hounding innocent customers, just like you...
(Do you have something to say about this story? Tell us what you think by emailing us here. Don't forget to include 'Civil recovery' in the subject line. Watchdog will publish a selection of viewers' comments underneath each story, both throughout and after the programme is on air. Please remember to include your name as you would like to see it published).
In summer 2008, Kate Field and her fiancé stopped for petrol at the local Somerfield garage - now run by the Co-op. Kate told Watchdog:
"We were on our way to a two week holiday to Cornwall. We both filled up our cars, then we went in to pay and they said sorry, we can't take cards, our card processing machine's not working. So they got us to fill out forms, no means of payment forms, and said we'd have to return within seven days to pay."
When Kate explained she was going on a fortnight's holiday, Somerfield asked her to drop the £32 in as soon as she got back home - which she did. But a year later, she received a letter from a company called Retail Loss Prevention Ltd. She told Watchdog:
"I got a very strongly worded letter saying that I'd committee wrongful actions, I'd taken goods without payment. I was absolutely amazed."
She was more amazed when she saw how much they were demanding. £169.76 - more than five times the original petrol bill. More letters followed, warning of court action if she didn't pay up, even though she'd sent them evidence proving she already had. Kate told Watchdog:
"The language in the letters was insulting really, I felt offended by it. For two months I had this possibility of going to court hanging over me. It was insulting, deeply insulting, to be called a shoplifter, as someone who has never broken the law. It's just astonishing that people can write to you, can put that in writing and accuse you of that."
Retail Loss Prevention has been employed by dozens of High Street names, from B&Q to Waitrose. Its reward for getting money back on their behalf is a reported 40% cut. No wonder, say critics, that it pursues people with such vigour. Even those who've done nothing wrong...
Richard Dunstan is from Citizens Advice Bureau. He told Watchdog:
"We don't know how many of those who receive a demand are innocent of the alleged offence, what we have established that a very large proportion are, and that's inevitable when you have a system where decisions about guilt or innocence, and what amounts of money to charge are being taken by people with a strong financial interest in those decisions."
So does that explain why sometimes, they're even prepared to ignore the word of the police? We know of one B&Q customer who picked up a new TV cable, and put it inside a box displaying a cheaper price. Now security staff accused him of doing it deliberately, to save £1.82, and called the police. But after studying the CCTV, officers confirmed - in writing - that he'd simply made an honest mistake.
Yet Retail Loss Prevention Ltd started chasing him for £137.50 in damages and costs. And now they're accusing him of making threats to staff, an allegation not reported to the police at the time.
So why make it now, when the police say they would have dealt with any threat there and then? Richard Dunstan told Watchdog:
"We think its quite shocking frankly that a major retailer such as B&Q should allow its agent to engage in harassment such as this. And try and intimidate a clearly innocent person in to paying money."
Palmer, Reifler and Associates are an American civil recovery firm who've also attracted criticism. As they don't actually have a licence to practice law in the UK, they use a British law firm to do it for them.
Last year, they contacted Carolyn's teenage daughter. Carolyn told Watchdog:
"The first letter that I saw arrived at the end of July - my daughter was away at the time, so I opened it wondering what it was all about. This letter said that she had admitted or allegedly committed this unlawful act of taking stolen goods."
This wasn't true. The letter referred to a visit her daughter had made to H&M with two friends. Carolyn told Watchdog:
"They were wandering round individually looking at clothes, and as they left the shop the three of them were approached by a security guard. The security guard took them to a little room where he took their names and addresses and called the police. She found out that her friend had actually been in the changing rooms and put some of the items in to her bag, she had no idea about this at the time. Now my daughter was allowed to go straightaway because she had no involvement, as far as the police were concerned, with the incident."
The Citizens' Advice Bureau wrote to H&M on Carolyn's behalf, asking why her daughter was being chased for payment - even though the police hadn't charged her with anything. H&M later agreed to cancel the pursuit of damages. They added this 'reassuring' explanation:
'Whilst H&M support the entire concept of Civil Recovery we do not believe that action should be taken against any person that did not actually commit a crime'.
Although the use of civil recovery firms is growing, this week's Law Commission consultation paper may make it harder for them to operate. It says they have no power to charge fixed sum penalties - or to add on certain costs and admin charges. Meanwhile, the police are uncomfortable with the way innocent people are being pursued.
Assistant Chief Constable Allyn Thomas is from the Association of Chief Police Officers. He told Watchdog:
"I think there is a concern where it's less clear that someone has committed an offence or less clear that you've suffered any loss and that some companies would seek fairly substantial damages where it's less clear what that is compensation for. Some of the cases highlighted, appear that the person has done nothing wrong at all, where really there's no suspicion that they have done anything wrong, and yet they still receive letters, and I think that's disturbing."
There's no doubt that retailers are currently under financial pressure - and they've every right to defend themselves against theft. But is the use of civil recovery agents really the right method? Allyn Thomas told Watchdog:
"Shoplifting and indeed crime of any kind is a very serious matter, but that means you need an open and fair process for dealing with it. We do have a system for dealing with allegations of crime, it's called the criminal justice system. This system involves the police and the courts. This is the privatisation of justice."
B&Q's response to Watchdog:
"At B&Q the safety and security of our customers and employees is a priority. Like many retailers we use Civil Recovery as a mechanism to deter shop lifters from our stores. We have ceased working with Retail Loss Prevention (RLP) having given them notice at the end of October 2010. We instructed them at the time to drop every case that had been highlighted by the Citizens Advice Bureau's report including the one you featured in tonight's programme. Our aim is to ensure our Civil Recovery policy is used in only the most responsible way."
British Retails Consortium statement:
The latest British Retail Consortium Annual Retail Crime Survey shows retail crime costs £1.1 billion a year, with retailers spending £210 million to protect their property and their people.
Especially now, retailers can ill-afford the financial burden of additional security. Hard-pressed customers can't afford to see it passed on to them either.
With police resources reducing, retailers must make effective use of all the alternative means of crime prevention available to them. Civil recovery is just one of these means.
The primary objective of civil recovery is to make sure people who commit crimes against businesses make up the losses suffered by their victims and pay the costs involved in recovering that money. Retailers have the right to protect themselves by using civil law and to deter would be offenders by operating civil recovery.
In recent debates, the Government has recognised the appropriate and proportionate use of civil recovery as one option available to retailers for dealing with low-level criminal activity that is also a civil wrong. Government believes that civil recovery, used proportionately, provides an effective response to low-value and often opportunistic crime.
The BRC's Overarching Principles reflect the importance our members put on having clear policies and procedures in place when operating Civil Recovery. The BRC and its members will consider the findings of the Law Commission report published on Tuesday 12 April and respond appropriately.
The cases highlighted - some of which have been provided by the CAB - are the accused's version of events only.
The Co-operative Group response:
A spokesman for The Co-operative Group commented:
"Clearly Ms Field should not have been pursued in this way and we're very sorry for the mistake which was due to an administrative error. We quite understand that people are on occasion, genuinely unable to pay for fuel at the time of purchase but it must be stressed that around 95 per cent of our customers who find themselves in this position, pay within a week and do not incur any costs whatsoever.
"On acquiring Somerfield in March 2009, we undertook a thorough review of civil recovery procedures. Under the system we now have in place, if customers cannot pay at the time of filling up then our procedure is to issue them with a copy of our Customer Charter which details what will happen. They are given seven days to return and settle the bill. If they do not, Retail Loss Prevention issues a letter asking them to pay within 40 days and adds an additional £5 to the total to cover administrative costs. Should they still fail to pay then a second letter will advise them of the intention to initiate civil proceedings, for which they will have to pay RLP any court costs incurred. In all cases, The Co-operative Group retains the original sum outstanding.
"Both Somerfield and The Co-operative Group began using this company at roughly the same time in 2005, the key difference being that while Somerfield used the company in its food stores and filling stations, prior to our acquisition of Somerfield in March 2009, the Co-operative Group has only ever used them in respect of filling station debt. Our policy is to pursue shoplifters through the criminal justice system. Retail Loss Prevention has never issued any court proceedings in respect of Somerfield and on only three occasions for The Co-operative Group - in all cases, both the original sum and costs were successfully recovered.
"Since acquiring Somerfield filling stations, we have made improvements which automate and tighten up the system. Customers who are unable to pay, are now issued with a bar coded till receipt which automatically records the outstanding monies on our computer systems rather than having it recorded manually."
With regards to the Law Commission consultation paper, they told Watchdog:'As a consumer-owned business, we welcome these suggestions.'
Goddard Smith and Palmer Reifler & Associates response:
It is estimated that retail theft costs retailers £4.4bn in 2010. Ultimately those costs are passed onto consumers and it believed that each UK household bears that cost at £180 a year. Palmer Reifler and Goddard Smith act at the request of the retailer in an aid to try and reduce the burden suffered to retailers and UK households.
Our retail clients take every effort to train their staff to stop people in the act of taking property from their stores.
When a person tries to take goods from a retailer, that person is neither a consumer nor a visitor to the premises and commits an act of trespass. The act of theft gives rise to a common law cause of action for trespass to goods and property, and the appropriate remedy is compensation.
The act of requesting compensation from individuals under our civil legal system is not something new. In civil claims the burden of proof for compensation is much lower standard than the burden of proof for the criminal prosecution of theft. There is no requirement for there to be a criminal prosecution in order that a request for compensation can be made.
Our clients cannot force the CPS to commence criminal prosecutions for theft against the perpetrators and therefore use civil recovery as real deterrent to dissuade repeat occurrences.
It is our view that our clients may recover a compensatory award to help reimburse the losses they suffered as a direct result of the allegation of theft. Whilst this does not eliminate the total losses suffered it does help reduce it and those savings can be passed on to the consumer.
The sum of money claimed from persons alleged to have committed theft is made up of the following:
1. Any damage caused to the stolen item
2. The loss of time suffered by the retailer, including the costs associated with re-tagging or re-stocking the item or items.
3. The costs associated with the investigation of the theft including the time taken to:
a. observe and investigate specific acts of theft prior to the apprehension, and;
b. the apprehension and detention of the individual and the investigation meeting, and;
c. compiling the documentation in respect of the incident to be provided to the Police / CPS, and;
d. deal with any criminal prosecution that may be advanced by the CPS.
4. As well as any other loss suffered by the retailer including:
a. ithholding the stolen goods from the shop floor during the investigations causing the retailer to suffer a loss of chance of a sale, and;
b. Withholding the stolen goods from the shop floor where they are used as evidence for any criminal investigation, and;
c. Returning the stolen goods to the manufacturer or discarding goods because of the damage caused to them.
Given that any theft is a major disruption to a business we do not believe that our clients' claims for compensation as a result of theft, will be denied by the courts.
The letters that we send to our clients opponents are not misleading nor unduly aggressive and comply with all general protocol requirements and the Civil Procedure Rules.
We do not determine liability which is left to be determined by the courts where a settlement cannot be reached. Typically, out of court settlements save court time and our negotiations for settlement aim to save court time and legal fees of our clients and our client's opposition.
H&M Statement to BBC Watchdog - H&M Spokesperson
We do not wish to comment on individual cases or internal procedures. At a time when there is growing demand on a diminishing police resource, retailers are having to find new and innovative ways of working with the police to ensure that retail crime is addressed without placing an additional burden on an already overstretched police service. For this reason H&M believe that civil recovery does currently have a place within our overall loss prevention strategy. We believe that civil recovery action should be proportionate to the crime and considered case by case. Civil recovery is a deterrent, not an income generator. It does not and is not intended to compensate us for the costs of crime prevention.
Statement for BBC Watchdog from Retail Loss Prevention in Respect of Civil Recovery
Retail Loss Prevention Limited (RLP) is a UK-wide organisation which has been working on behalf of retailers and other organisations since 1998. Our aim is to support Police & Crime Partnerships in crime reduction, particularly as a deterrent and to help discourage repeat incidents.
Due to client confidentiality, we are never able to discuss individual cases; however we are always willing to discuss the general principles for civil recovery.
Businesses are entitled to seek redress in the civil courts using established civil law. In a civil claim for damages, RLP takes a client's instructions and considers whether there is sufficient evidence to support "liability" in a civil action before proceeding. There is no question of "guilt or innocence" in a civil claim. That is the role of the criminal courts.
A typical client would be a retailer or commercial business who has suffered a loss by theft, fraud or criminal damage. Action is taken by clients seeking a contribution to such losses to deter individuals from committing further incidents whilst bearing the remainder of the costs themselves. The law prevents anyone from profiteering.
The evidence submitted is always very thorough and provides a full account of events including eye witness statements, police action taken and often CCTV footage as well.
Incidents of this type expend a significant amount of time. Following observation there is the apprehension, interview, calling and waiting for police and the administrative processes to record all information and prepare witness statements in relation to the incident. At least one security professional, another member of staff and probably the store/duty manager will all be taken away from their normal duties causing significant disruption and cost to the business. The incident also gives rise to administration costs and maintaining systems to deal with incidents.
RLP operates within strict core principles, and client specific principles. Our letters set out the legal position in accordance with the Practice Direction for Pre-action Conduct and the Civil Procedure Rules. All solicitors working on our behalf operate within the industry-wide Solicitors Conduct Rules.
When a case is pursued, every Defendant has a right to challenge a claim for compensation where there is a defence. As part of the legal process RLP investigate thoroughly any disputed matters to reach an amicable resolution between the parties. Our priority at all times is to secure a fair and just outcome. Ultimately, if a civil claim is defended and the matter cannot be resolved, the Court will decide on liability.
We believe that a basic rule for all legal cases must be adhered to; that is, that claims must not be ignored. This is clearly borne out by the two cases cited. In one, the individual engaged and the matter was resolved, in the other the case was ignored and the matter therefore could not be resolved.
It should be noted that claims are routinely issued in Court and that RLP rely on established case law to support its clients claims.
This legal concept was tested in lower value first instance cases and the heads of damages were accepted in County Court by separate judges. Whilst first instance cases do not create a legally binding authority, they have some persuasive authority. The Law Commission, Home Office and Ministry of Justice have the information on these cases.
The claim that justice may not be served because the parties involved have a financial interest is fundamentally untrue.
Turning to RLP's specific role and remit, we provide a range of comprehensive services to our clients including training, asset protection and risk prevention. We also offer pre civil recovery communication, deterrent promotion to youth offending teams and information sharing directly with the police and crime partnerships.
In addition, RLP provides support for crime partnerships and works directly with a number of police forces and other agencies, across the UK. This work is at the heart of efforts to help combat retail and other business crime such as insurance fraud, fuel forecourt crime and fare avoidance and graffiti on the railways.
RLP has issued clear and transparent guidelines to all agencies in order that they can assist individuals with civil recovery claims. These are also fully detailed on our website.
In concluding, we note that it has been said that civil recovery is a "lucrative business" for the agents involved, with figures quoted of £14 million. We would like to make clear that this is a significant overstatement as far as RLP is concerned. Our accounts can be inspected at Companies House and this will show clearly that our entire turnover is less than 10% of that figure.
Put simply, civil recovery is a deterrent to crime not a revenue generator, since the deterrent element is operated in a multi faceted way.
Retail Loss Prevention Limited would never condone the issue of a claim to innocent people. We understand and acknowledge that there are always two sides to all claims that must be considered.
Comments for BBC Watchdog from Retail Loss Prevention in Respect of Civil Recovery
Please find below comments on additional points sent to RLP following Law Commission consultation paper.
1. If someone has stolen goods, there can be no objection to a demand that they should pay for the goods which have been stolen. However, "civil recovery" is problematic. One problem is that the recipients often deny that they have committed any theft.
RLP understand and acknowledge that there are always two sides to all claims that must be considered, hence why individuals are advised to engage with RLP and also to seek their own independent legal advice so matters can be resolved.
2. A further problem is that agents demand that the recipient pays a fixed sum for "investigation", "security" or "administration" costs. These "fixed sums" have no legal basis. If the theft caused significant disruption to the retailer's business, then the law allows the store to claim for the staff time diverted to dealing with the effects of the disruption. However, the store would need to prove that the disruption was significant, and that staff time was actually diverted. The law does not generally allow fixed sum penalties. Nor does it allow stores to apportion the overheads incurred for security and surveillance to individual shoplifters.
Although clients are lawfully entitled to seek the full extent of their losses, only a contribution to actual losses are sought. The claims are largely brought in the tort of conversion and trespass. A Claimant may seek to recover its losses which are a reasonably foreseeable consequence of a Defendant's actions.
3. That misleading and aggressive debt collection should be covered by their reforms.
RLP comply with the Practice Direction relating to Pre Action Conduct and the Civil Procedure Rules 1998. Damages in tort are compensatory, they are not debts.
4. That consumers should have a clear an easy route to redress if they fall victim to misleading and aggressive practices.
A shoplifter is not a consumer. In the law commission report they advise," It is right that "'consumer' is not a status: it is a function". Thus "whether a person is a consumer depends not on who he is but on what he is doing"
Possible flaws with civil laws...
In order to see this content you need to have both Javascript enabled and Flash installed. Visit BBC Webwise for full instructions. If you're reading via RSS, you'll need to visit the blog to access this content.
They call it civil recovery. It sounds fair enough, until you realise they're using private companies to pursue those damages, companies who've been hounding innocent customers, just like you...
(Do you have something to say about this story? Tell us what you think by emailing us here. Don't forget to include 'Civil recovery' in the subject line. Watchdog will publish a selection of viewers' comments underneath each story, both throughout and after the programme is on air. Please remember to include your name as you would like to see it published).
In summer 2008, Kate Field and her fiancé stopped for petrol at the local Somerfield garage - now run by the Co-op. Kate told Watchdog:
"We were on our way to a two week holiday to Cornwall. We both filled up our cars, then we went in to pay and they said sorry, we can't take cards, our card processing machine's not working. So they got us to fill out forms, no means of payment forms, and said we'd have to return within seven days to pay."
When Kate explained she was going on a fortnight's holiday, Somerfield asked her to drop the £32 in as soon as she got back home - which she did. But a year later, she received a letter from a company called Retail Loss Prevention Ltd. She told Watchdog:
"I got a very strongly worded letter saying that I'd committee wrongful actions, I'd taken goods without payment. I was absolutely amazed."
She was more amazed when she saw how much they were demanding. £169.76 - more than five times the original petrol bill. More letters followed, warning of court action if she didn't pay up, even though she'd sent them evidence proving she already had. Kate told Watchdog:
"The language in the letters was insulting really, I felt offended by it. For two months I had this possibility of going to court hanging over me. It was insulting, deeply insulting, to be called a shoplifter, as someone who has never broken the law. It's just astonishing that people can write to you, can put that in writing and accuse you of that."
Retail Loss Prevention has been employed by dozens of High Street names, from B&Q to Waitrose. Its reward for getting money back on their behalf is a reported 40% cut. No wonder, say critics, that it pursues people with such vigour. Even those who've done nothing wrong...
Richard Dunstan is from Citizens Advice Bureau. He told Watchdog:
"We don't know how many of those who receive a demand are innocent of the alleged offence, what we have established that a very large proportion are, and that's inevitable when you have a system where decisions about guilt or innocence, and what amounts of money to charge are being taken by people with a strong financial interest in those decisions."
So does that explain why sometimes, they're even prepared to ignore the word of the police? We know of one B&Q customer who picked up a new TV cable, and put it inside a box displaying a cheaper price. Now security staff accused him of doing it deliberately, to save £1.82, and called the police. But after studying the CCTV, officers confirmed - in writing - that he'd simply made an honest mistake.
Yet Retail Loss Prevention Ltd started chasing him for £137.50 in damages and costs. And now they're accusing him of making threats to staff, an allegation not reported to the police at the time.
So why make it now, when the police say they would have dealt with any threat there and then? Richard Dunstan told Watchdog:
"We think its quite shocking frankly that a major retailer such as B&Q should allow its agent to engage in harassment such as this. And try and intimidate a clearly innocent person in to paying money."
Palmer, Reifler and Associates are an American civil recovery firm who've also attracted criticism. As they don't actually have a licence to practice law in the UK, they use a British law firm to do it for them.
Last year, they contacted Carolyn's teenage daughter. Carolyn told Watchdog:
"The first letter that I saw arrived at the end of July - my daughter was away at the time, so I opened it wondering what it was all about. This letter said that she had admitted or allegedly committed this unlawful act of taking stolen goods."
This wasn't true. The letter referred to a visit her daughter had made to H&M with two friends. Carolyn told Watchdog:
"They were wandering round individually looking at clothes, and as they left the shop the three of them were approached by a security guard. The security guard took them to a little room where he took their names and addresses and called the police. She found out that her friend had actually been in the changing rooms and put some of the items in to her bag, she had no idea about this at the time. Now my daughter was allowed to go straightaway because she had no involvement, as far as the police were concerned, with the incident."
The Citizens' Advice Bureau wrote to H&M on Carolyn's behalf, asking why her daughter was being chased for payment - even though the police hadn't charged her with anything. H&M later agreed to cancel the pursuit of damages. They added this 'reassuring' explanation:
'Whilst H&M support the entire concept of Civil Recovery we do not believe that action should be taken against any person that did not actually commit a crime'.
Although the use of civil recovery firms is growing, this week's Law Commission consultation paper may make it harder for them to operate. It says they have no power to charge fixed sum penalties - or to add on certain costs and admin charges. Meanwhile, the police are uncomfortable with the way innocent people are being pursued.
Assistant Chief Constable Allyn Thomas is from the Association of Chief Police Officers. He told Watchdog:
"I think there is a concern where it's less clear that someone has committed an offence or less clear that you've suffered any loss and that some companies would seek fairly substantial damages where it's less clear what that is compensation for. Some of the cases highlighted, appear that the person has done nothing wrong at all, where really there's no suspicion that they have done anything wrong, and yet they still receive letters, and I think that's disturbing."
There's no doubt that retailers are currently under financial pressure - and they've every right to defend themselves against theft. But is the use of civil recovery agents really the right method? Allyn Thomas told Watchdog:
"Shoplifting and indeed crime of any kind is a very serious matter, but that means you need an open and fair process for dealing with it. We do have a system for dealing with allegations of crime, it's called the criminal justice system. This system involves the police and the courts. This is the privatisation of justice."
B&Q's response to Watchdog:
"At B&Q the safety and security of our customers and employees is a priority. Like many retailers we use Civil Recovery as a mechanism to deter shop lifters from our stores. We have ceased working with Retail Loss Prevention (RLP) having given them notice at the end of October 2010. We instructed them at the time to drop every case that had been highlighted by the Citizens Advice Bureau's report including the one you featured in tonight's programme. Our aim is to ensure our Civil Recovery policy is used in only the most responsible way."
British Retails Consortium statement:
The latest British Retail Consortium Annual Retail Crime Survey shows retail crime costs £1.1 billion a year, with retailers spending £210 million to protect their property and their people.
Especially now, retailers can ill-afford the financial burden of additional security. Hard-pressed customers can't afford to see it passed on to them either.
With police resources reducing, retailers must make effective use of all the alternative means of crime prevention available to them. Civil recovery is just one of these means.
The primary objective of civil recovery is to make sure people who commit crimes against businesses make up the losses suffered by their victims and pay the costs involved in recovering that money. Retailers have the right to protect themselves by using civil law and to deter would be offenders by operating civil recovery.
In recent debates, the Government has recognised the appropriate and proportionate use of civil recovery as one option available to retailers for dealing with low-level criminal activity that is also a civil wrong. Government believes that civil recovery, used proportionately, provides an effective response to low-value and often opportunistic crime.
The BRC's Overarching Principles reflect the importance our members put on having clear policies and procedures in place when operating Civil Recovery. The BRC and its members will consider the findings of the Law Commission report published on Tuesday 12 April and respond appropriately.
The cases highlighted - some of which have been provided by the CAB - are the accused's version of events only.
The Co-operative Group response:
A spokesman for The Co-operative Group commented:
"Clearly Ms Field should not have been pursued in this way and we're very sorry for the mistake which was due to an administrative error. We quite understand that people are on occasion, genuinely unable to pay for fuel at the time of purchase but it must be stressed that around 95 per cent of our customers who find themselves in this position, pay within a week and do not incur any costs whatsoever.
"On acquiring Somerfield in March 2009, we undertook a thorough review of civil recovery procedures. Under the system we now have in place, if customers cannot pay at the time of filling up then our procedure is to issue them with a copy of our Customer Charter which details what will happen. They are given seven days to return and settle the bill. If they do not, Retail Loss Prevention issues a letter asking them to pay within 40 days and adds an additional £5 to the total to cover administrative costs. Should they still fail to pay then a second letter will advise them of the intention to initiate civil proceedings, for which they will have to pay RLP any court costs incurred. In all cases, The Co-operative Group retains the original sum outstanding.
"Both Somerfield and The Co-operative Group began using this company at roughly the same time in 2005, the key difference being that while Somerfield used the company in its food stores and filling stations, prior to our acquisition of Somerfield in March 2009, the Co-operative Group has only ever used them in respect of filling station debt. Our policy is to pursue shoplifters through the criminal justice system. Retail Loss Prevention has never issued any court proceedings in respect of Somerfield and on only three occasions for The Co-operative Group - in all cases, both the original sum and costs were successfully recovered.
"Since acquiring Somerfield filling stations, we have made improvements which automate and tighten up the system. Customers who are unable to pay, are now issued with a bar coded till receipt which automatically records the outstanding monies on our computer systems rather than having it recorded manually."
With regards to the Law Commission consultation paper, they told Watchdog:'As a consumer-owned business, we welcome these suggestions.'
Goddard Smith and Palmer Reifler & Associates response:
It is estimated that retail theft costs retailers £4.4bn in 2010. Ultimately those costs are passed onto consumers and it believed that each UK household bears that cost at £180 a year. Palmer Reifler and Goddard Smith act at the request of the retailer in an aid to try and reduce the burden suffered to retailers and UK households.
Our retail clients take every effort to train their staff to stop people in the act of taking property from their stores.
When a person tries to take goods from a retailer, that person is neither a consumer nor a visitor to the premises and commits an act of trespass. The act of theft gives rise to a common law cause of action for trespass to goods and property, and the appropriate remedy is compensation.
The act of requesting compensation from individuals under our civil legal system is not something new. In civil claims the burden of proof for compensation is much lower standard than the burden of proof for the criminal prosecution of theft. There is no requirement for there to be a criminal prosecution in order that a request for compensation can be made.
Our clients cannot force the CPS to commence criminal prosecutions for theft against the perpetrators and therefore use civil recovery as real deterrent to dissuade repeat occurrences.
It is our view that our clients may recover a compensatory award to help reimburse the losses they suffered as a direct result of the allegation of theft. Whilst this does not eliminate the total losses suffered it does help reduce it and those savings can be passed on to the consumer.
The sum of money claimed from persons alleged to have committed theft is made up of the following:
1. Any damage caused to the stolen item
2. The loss of time suffered by the retailer, including the costs associated with re-tagging or re-stocking the item or items.
3. The costs associated with the investigation of the theft including the time taken to:
a. observe and investigate specific acts of theft prior to the apprehension, and;
b. the apprehension and detention of the individual and the investigation meeting, and;
c. compiling the documentation in respect of the incident to be provided to the Police / CPS, and;
d. deal with any criminal prosecution that may be advanced by the CPS.
4. As well as any other loss suffered by the retailer including:
a. ithholding the stolen goods from the shop floor during the investigations causing the retailer to suffer a loss of chance of a sale, and;
b. Withholding the stolen goods from the shop floor where they are used as evidence for any criminal investigation, and;
c. Returning the stolen goods to the manufacturer or discarding goods because of the damage caused to them.
Given that any theft is a major disruption to a business we do not believe that our clients' claims for compensation as a result of theft, will be denied by the courts.
The letters that we send to our clients opponents are not misleading nor unduly aggressive and comply with all general protocol requirements and the Civil Procedure Rules.
We do not determine liability which is left to be determined by the courts where a settlement cannot be reached. Typically, out of court settlements save court time and our negotiations for settlement aim to save court time and legal fees of our clients and our client's opposition.
H&M Statement to BBC Watchdog - H&M Spokesperson
We do not wish to comment on individual cases or internal procedures. At a time when there is growing demand on a diminishing police resource, retailers are having to find new and innovative ways of working with the police to ensure that retail crime is addressed without placing an additional burden on an already overstretched police service. For this reason H&M believe that civil recovery does currently have a place within our overall loss prevention strategy. We believe that civil recovery action should be proportionate to the crime and considered case by case. Civil recovery is a deterrent, not an income generator. It does not and is not intended to compensate us for the costs of crime prevention.
Statement for BBC Watchdog from Retail Loss Prevention in Respect of Civil Recovery
Retail Loss Prevention Limited (RLP) is a UK-wide organisation which has been working on behalf of retailers and other organisations since 1998. Our aim is to support Police & Crime Partnerships in crime reduction, particularly as a deterrent and to help discourage repeat incidents.
Due to client confidentiality, we are never able to discuss individual cases; however we are always willing to discuss the general principles for civil recovery.
Businesses are entitled to seek redress in the civil courts using established civil law. In a civil claim for damages, RLP takes a client's instructions and considers whether there is sufficient evidence to support "liability" in a civil action before proceeding. There is no question of "guilt or innocence" in a civil claim. That is the role of the criminal courts.
A typical client would be a retailer or commercial business who has suffered a loss by theft, fraud or criminal damage. Action is taken by clients seeking a contribution to such losses to deter individuals from committing further incidents whilst bearing the remainder of the costs themselves. The law prevents anyone from profiteering.
The evidence submitted is always very thorough and provides a full account of events including eye witness statements, police action taken and often CCTV footage as well.
Incidents of this type expend a significant amount of time. Following observation there is the apprehension, interview, calling and waiting for police and the administrative processes to record all information and prepare witness statements in relation to the incident. At least one security professional, another member of staff and probably the store/duty manager will all be taken away from their normal duties causing significant disruption and cost to the business. The incident also gives rise to administration costs and maintaining systems to deal with incidents.
RLP operates within strict core principles, and client specific principles. Our letters set out the legal position in accordance with the Practice Direction for Pre-action Conduct and the Civil Procedure Rules. All solicitors working on our behalf operate within the industry-wide Solicitors Conduct Rules.
When a case is pursued, every Defendant has a right to challenge a claim for compensation where there is a defence. As part of the legal process RLP investigate thoroughly any disputed matters to reach an amicable resolution between the parties. Our priority at all times is to secure a fair and just outcome. Ultimately, if a civil claim is defended and the matter cannot be resolved, the Court will decide on liability.
We believe that a basic rule for all legal cases must be adhered to; that is, that claims must not be ignored. This is clearly borne out by the two cases cited. In one, the individual engaged and the matter was resolved, in the other the case was ignored and the matter therefore could not be resolved.
It should be noted that claims are routinely issued in Court and that RLP rely on established case law to support its clients claims.
This legal concept was tested in lower value first instance cases and the heads of damages were accepted in County Court by separate judges. Whilst first instance cases do not create a legally binding authority, they have some persuasive authority. The Law Commission, Home Office and Ministry of Justice have the information on these cases.
The claim that justice may not be served because the parties involved have a financial interest is fundamentally untrue.
Turning to RLP's specific role and remit, we provide a range of comprehensive services to our clients including training, asset protection and risk prevention. We also offer pre civil recovery communication, deterrent promotion to youth offending teams and information sharing directly with the police and crime partnerships.
In addition, RLP provides support for crime partnerships and works directly with a number of police forces and other agencies, across the UK. This work is at the heart of efforts to help combat retail and other business crime such as insurance fraud, fuel forecourt crime and fare avoidance and graffiti on the railways.
RLP has issued clear and transparent guidelines to all agencies in order that they can assist individuals with civil recovery claims. These are also fully detailed on our website.
In concluding, we note that it has been said that civil recovery is a "lucrative business" for the agents involved, with figures quoted of £14 million. We would like to make clear that this is a significant overstatement as far as RLP is concerned. Our accounts can be inspected at Companies House and this will show clearly that our entire turnover is less than 10% of that figure.
Put simply, civil recovery is a deterrent to crime not a revenue generator, since the deterrent element is operated in a multi faceted way.
Retail Loss Prevention Limited would never condone the issue of a claim to innocent people. We understand and acknowledge that there are always two sides to all claims that must be considered.
Comments for BBC Watchdog from Retail Loss Prevention in Respect of Civil Recovery
Please find below comments on additional points sent to RLP following Law Commission consultation paper.
1. If someone has stolen goods, there can be no objection to a demand that they should pay for the goods which have been stolen. However, "civil recovery" is problematic. One problem is that the recipients often deny that they have committed any theft.
RLP understand and acknowledge that there are always two sides to all claims that must be considered, hence why individuals are advised to engage with RLP and also to seek their own independent legal advice so matters can be resolved.
2. A further problem is that agents demand that the recipient pays a fixed sum for "investigation", "security" or "administration" costs. These "fixed sums" have no legal basis. If the theft caused significant disruption to the retailer's business, then the law allows the store to claim for the staff time diverted to dealing with the effects of the disruption. However, the store would need to prove that the disruption was significant, and that staff time was actually diverted. The law does not generally allow fixed sum penalties. Nor does it allow stores to apportion the overheads incurred for security and surveillance to individual shoplifters.
Although clients are lawfully entitled to seek the full extent of their losses, only a contribution to actual losses are sought. The claims are largely brought in the tort of conversion and trespass. A Claimant may seek to recover its losses which are a reasonably foreseeable consequence of a Defendant's actions.
3. That misleading and aggressive debt collection should be covered by their reforms.
RLP comply with the Practice Direction relating to Pre Action Conduct and the Civil Procedure Rules 1998. Damages in tort are compensatory, they are not debts.
4. That consumers should have a clear an easy route to redress if they fall victim to misleading and aggressive practices.
A shoplifter is not a consumer. In the law commission report they advise," It is right that "'consumer' is not a status: it is a function". Thus "whether a person is a consumer depends not on who he is but on what he is doing"
Possible flaws with civil laws...