British Telecommunications Plc , R (on the application of) v Secretary of State for Culture, Olympics, Media and Sport

Under the Technical Standards Directive, notification depends on whether an enacted measure has legal effects of its own for individuals. A scheme conditional on a future code, both for its legal effect and detailed content, need not be notified before enactment. A severable information-gathering power may nevertheless require notification. Under the Electronic Commerce Directive, mere-conduit immunity concerns liability for the underlying infringement, not regulatory duties to process reports, notify subscribers, compile lists or bear related costs. The copyright exclusion has its ordinary, broad meaning. Processing relevant special-category data may be necessary to establish, exercise or defend copyright rights. The Privacy and Electronic Communications Directive permits proportionate protection of property rights. Sector-specific copyright measures need not form part of a general authorisation. Administrative charges include appeal case fees, but not ISPs’ internal costs.

British Telecommunications Plc and TalkTalk Telecom Group Plc, internet service providers, appealed against the decision of Kenneth Parker J in judicial review proceedings concerning the online copyright-infringement provisions of the Digital Economy Act 2010 and a draft costs order.

The High Court rejected most of the challenge but declared that the draft Costs Order would be incompatible with Article 12 of the Authorisation Directive insofar as it required ISPs to pay qualifying costs. The appeal concerned four issues: notification under the Technical Standards Directive; compatibility with the Electronic Commerce Directive; compatibility with the data-protection and privacy directives; and compatibility with the Authorisation Directive, including the treatment of costs, smaller ISPs and mobile network operators.

Lord Justice Richards gave the leading judgment. Lord Justice Patten and Lady Justice Arden agreed. The appeal was dismissed on the substantive grounds, but allowed in relation to case fees, and the declaration below was enlarged accordingly.

1. Notification. The relevant question under the Technical Standards Directive was whether the statutory provisions had legal effects of their own for individuals. The initial obligations were conditional on a code being made and depended on that code for their detailed content. They therefore did not require notification before enactment. The distinct power under section 135(1) of the Communications Act 2003 to require information did have legal effects and was unenforceable for want of notification, but that did not invalidate the wider scheme.
2. Electronic commerce. Article 12 concerned liability for the underlying information or copyright infringement, not regulatory liabilities arising from duties to receive reports, notify subscribers, compile lists, pay related costs or comply with technical measures. Article 12(3) remained consistent with that construction because it permits orders requiring an ISP to terminate or prevent infringement without imposing liability for the infringement itself. The copyright exclusion in the Annex to the Directive had its ordinary meaning and was not confined to harmonised copyright-protection measures.
3. Data protection and privacy. Processing by copyright owners of data revealing special categories of information could fall within the exception for processing necessary to establish, exercise or defend legal rights. The educational purpose of the scheme did not prevent that conclusion. Article 15(1) of the Privacy and Electronic Communications Directive extended to protection of property rights, including copyright, and was not limited to civil proceedings.
4. Authorisation and costs. The Framework Directive permitted national measures pursuing general-interest objectives, including audiovisual policy and copyright protection, outside the conditions of a general authorisation. The phrase in accordance with the Electronic Commerce Directive meant compatible with, rather than positively required by, that Directive. Qualifying costs and case fees were administrative charges under Article 12 of the Authorisation Directive; relevant costs were ISPs’ internal costs and were not administrative charges. The exclusion of smaller ISPs and mobile operators was proportionate on the evidence.
5. No reference to the Court of Justice was necessary. The declaration was enlarged to include case fees.

1. Court of Appeal (Civil Division) allowed the appeal on the classification of case fees under Article 12 of the Authorisation Directive, dismissed the remaining grounds and enlarged the declaration: [2012] EWCA Civ 232.
2. High Court of Justice, Queen’s Bench Division, Administrative Court rejected most of the judicial review challenge but declared the draft Costs Order incompatible with Article 12 insofar as it required payment of qualifying costs: [2011] EWHC 1021 (Admin).