Edge Telecommunications Limited v Ofcom

A regulatory statutory duty to make exemption regulations does not ordinarily create a private law action for damages. Where the duty forms part of a complex telecommunications scheme, is exercised in the public interest, involves regulatory judgment and affects a potentially wide class suffering economic loss, Parliament is unlikely to have intended damages as an additional remedy. The appropriate domestic remedy is judicial review. The existence of a former Francovich remedy for breach of an EU directive does not imply a surviving or wider domestic damages claim. For limitation purposes, a duty to “make” exemption regulations is not discharged until the regulations have come into effect.

Edge claimed damages from Ofcom for alleged breaches of section 8(4) of the Wireless Telegraphy Act 2006. It contended that Ofcom was required to exempt commercial single-user and multi-user GSM gateways from licensing requirements and that its failure to do so caused economic loss.

The court tried two preliminary issues: whether the claims were time-barred and whether section 8(4) gave rise to an actionable claim in damages. The claim concerned the period before COSUGs were exempted in 2016 and before Ofcom’s proposed COMUG exemption was prevented by a ministerial national-security direction in 2017.

1. Actionability. The claims for damages were dismissed. A former claim for damages under Article 5 of the Authorisation Directive, as considered in Recall Support Services v Secretary of State for Culture Media and Sport [2013] EWHC 3091 (Ch) and upheld by the Court of Appeal [2014] EWCA Civ 1370, did not establish an additional domestic claim under section 8(4) of the Wireless Telegraphy Act 2006.
2. Under X (minors) v Bedfordshire County Council [1995] 2 AC 633, breach of statutory duty does not ordinarily create a private action unless the statute protects a limited class and Parliament intended that remedy. Section 8 was part of a complex regulatory scheme for telecommunications, exercised by Ofcom in the public interest and with regulatory expertise. Its section 8(5) conditions involved public-interest judgments entrusted to Ofcom, not the court.
3. The statutory scheme had a strong public-law character. Ofcom acted as if it were a Minister when making regulations, subject to consultation under section 122. Complaints about its exercise or non-exercise of power were appropriately dealt with by judicial review. The possibility that the scheme conferred benefits on prospective users did not convert the regulatory duties into private rights in damages.
4. It was inherently unlikely that Parliament intended potentially substantial claims for pure economic loss by a wide range of telecommunications actors, particularly where the claim alleged breach alone rather than negligence or bad faith. The absence of an express damages remedy, contrasted with section 104 of the Communications Act 2003, supported that conclusion.
5. Limitation. Although academic in consequence, both claims were in time. In section 8(4), “make” meant bring into effect. The alleged duty was not discharged merely when regulations were made; it ended only when regulations actually exempted the relevant apparatus.