OFCOM had the power to delegate to the relevant “enforcement authority” under section 120 of the Communications Act 2003 all powers of enforcement of the provisions of the Code of Practice under the Act. It was implicit in the code that the provisions in it for imposing sanctions upon premium rate service providers for breach of the code were subject to the limitations set out in section 123(2) of the Act:

Robin Hollington QC, sitting as a deputy High Court judge, so held in the Chancery Division when finding in favour of the claimant enforcement authority, Phonepaylus Ltd, on a preliminary issue and on holding that the claimant was entitled to summary judgment. The claimant was the producer of the Code of Practice 12th edition, for the purposes of section 120 and following of the Communications Act 2003, which concerned the regulation of premium rate services (“PRS”). PRS were businesses where a member of the public was induced to ring up a telephone number, at a cost significantly in excess of the costs of an ordinary telephone call, so as to access a service which was held out as being valuable. The present case was concerned with the legality of fines imposed upon PRS providers under the code approved under the Act. The claimant was “the enforcement authority” for the purposes of section 120 of the Act. The first defendant, Waqar Ashraf, had become registered with the claimant as a type of PRS provider. An adjudication tribunal charged with adjudicating upon allegations under the code subsequently found that the first defendant had committed a number of breaches of the code and imposed a fine. The first defendant failed to pay the fine and the claimant therefore commenced an action to recover it. The matter came before the High Court, where the judge ordered the hearing of the preliminary issue whether “the claimant is the correct party to have pursued the proceedings for the relief sought”. The present hearing was to determine that preliminary issue together with the claimant’s subsequent application for summary judgment. The first defendant’s submissions were summarised at para 20 of the judgment; he argued that only OFCOM had power to enforce a fine imposed under the code and could not delegate that power to the enforcement authority. As part of the its summary judgment application, the first defendant submitted that the code was invalid because it did not incorporate any reference to the provisions of section 123(2) of the Act that the maximum penalty for a breach of the code was £250,000. The first defendant also submitted that under the Act there was no power under the code to impose a single composite penalty for a number of contraventions of its provisions, as had occurred in this instance.

ROBIN HOLLINGTON QC said that the first defendant’s submission that only OFCOM had power to enforce a fine imposed under the code and that it could not delegate that power to the enforcement authority was incorrect. Many provisions of the Act made it clear that OFCOM could delegate to the claimant as the enforcement authority all powers of enforcement of the provisions of the code approved by OFCOM, including the recovery of fines and administrative charges imposed by the adjudication tribunal. The words in section 120(3)(a) of the Act, namely “directions given in accordance with an approved code by the enforcement authority and for the purpose of enforcing its provisions” were quite wide enough, read in the whole statutory and regulatory context, to comprehend the enforcement of the provisions of the code. It followed that the court found in favour of the claimant on the preliminary issue. On the summary judgment application, it was implicit in the code that the provisions in it for imposing sanctions upon PRS providers for breach of the code were subject to the limitations set out in section 123(2) of the Act: see Bunney v Burns Anderson plc [2008] Bus LR 22. Finally, did it make any difference that, in the light of the proposed amendment to section 121(f) of the Act, there was no provision in the Act which gave the tribunal the power to impose a single composite fine for several contraventions of the code, as it did here? The answer was plainly no. Accordingly, the first defendant had no real prospect of successfully defending the claim and the claimant was entitled to summary judgment.