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Debt Advice Handbook 14th edition

Civil recovery
Over the past few years, many people have been threatened with county court action by civil recovery agents for the recovery of losses allegedly incurred by retailers following allegations either of theft by employees or shoplifting by customers, in many cases involving goods of relatively low value. Although in some cases the person has been charged and prosecuted for a criminal offence, in many cases there has been no police involvement and, in most shoplifting cases, the goods have been recovered undamaged and able to be resold by the retailer.
The legal position
As well as being a criminal offence, shoplifting is a ’tort’ (civil wrong).
It is a basic principle of the law of tort that a creditor can only take action if it can prove that the client’s wrongful conduct caused the damage for which compensation is claimed.
Special features
Civil recovery agents typically demand damages for ’wrongful actions’ and threaten to issue proceedings to recover:
    the value of goods stolen but not recovered; and/or
    staff and/or management time investigating and/or dealing with the incident; and/or
    administration costs; and/or
    apportioned amounts for general security and surveillance costs.
Claims for time, administration and a proportion of security costs are often based on a sliding scale of fixed costs, with the amount claimed rising in direct proportion to the value of the goods involved.
In one case, a circuit judge decided that there are recoverable amounts for:1A Retailer v Ms B and Ms K, Oxford County Court, 9 May 2012. See also R Dunstan and G Skipwith, ‘(Un)civil Recovery’, Adviser 142.
    the loss of value and/or profit of items not recovered from shoplifters;
    specific, direct costs incurred in apprehending shoplifters;
    physical damage caused by shoplifters in the course of the theft or their apprehension;
    personal injury caused by a shoplifter to a security person;
    diversion of a member of staff, such as a cashier, from her/his usual duties in order to chase and capture shoplifters.
The judge said that in order to successfully claim for staff time, the retailer must establish that the staff in question were ’significantly diverted from their usual activities’ or that there was ’significant disruption to its business’ or that there was loss of revenue generation. However, when observing, apprehending and dealing with shoplifters, security staff are, in fact, not diverted from their usual activities, but actively engaged in them and doing exactly what the retailer paid them to do. In these circumstances, no claim for time can be made.
The judge also said that claims for administration and apportioned security costs cannot be made unless the retailer can show that they were attributable to the activities of the shoplifter. If the amount spent by the retailer would have been the same regardless of whether the shoplifter had stayed at home or shoplifted at another retailer’s premises, no claim can be made.
 
1     A Retailer v Ms B and Ms K, Oxford County Court, 9 May 2012. See also R Dunstan and G Skipwith, ‘(Un)civil Recovery’, Adviser 142. »
Checklist for action
Advisers should take the following action.
    Check liability, including the damage claimed by the retailer.
    If the retailer has taken county court action, see Chapter 11. Although these are ’small claims’, representation at any hearing is advisable (see here).
    If the client chooses not to challenge liability, assist her/him to choose a strategy from Chapter 9, as this is a non-priority debt.