Is your business thinking of sending out unsolicited e-mails to help win sales? Think again because it could land you in serious trouble with the courts, warns Justin Harrington, Cardiff-based IT partner with Morgan Cole solicitors.

Every business and householder in Wales has grown frustrated at the proliferation of junk mail; seldom a day passes without a bundle of fliers and offers dropping through the letter box.

And of course the 21^st century equivalent of this paper mountain is the unsolicited e-mail, or spam mail, offering everything from cheap flights to even cheaper Eastern European ski chalets. Spam seems to have wetted the appetite of marketing bosses all over the world.

But Welsh firms thinking of simply dumping a load of sales and marketing information on would-be customers via a quick e-mail ought to think again, because a new landmark legal ruling means they could easily find themselves in court.

The ruling was in the Sheriff’s court in Scotland - a court equivalent to the small claims court in England and Wales – which this month awarded damages in respect of a single spam e-mail. Gordon Dick of Edinburgh sued Transcom and was awarded £750 in damages and £616 in costs plus interest in respect of a single e-mail received last year.

To facilitate further action by recipients of unsolicited e-mails, Mr Dick has now set up a web site, scotchspam.org.uk in order to assist other e-mail recipients to take action against unwanted marketing e-mails.

This is the first time that a court in the UK has awarded damages in respect of spam e-mail, though it’s not the first time that private individuals have hit back at companies who send out unsolicited e-mails.

Back in 2005, Nigel Roberts obtained £300 in an out of court settlement after he received unsolicited e-mails from a car company. 

Both these cases are a timely reminder of the risks inherent in e-mail marketing and the practical steps businesses should take prior to engaging in such activity.

The relevant provisions of the Privacy and Electronic Communications Regulations, the so called "PEC Regs", apply to e-mails, but also to text, picture and video messages. 

The general rules in respect of all such communications is that they should only be sent if the relevant individual has consented to such e-mails and, in any case, the identity of the sender is made clear and an e-mail address provided for opting out of future marketing e-mails. 

There is however an exception from the need for prior consent, where all of the following circumstances have been met:

• you obtained the details as a result of a sale (or the negotiations for the sale) of a product or service.  By way of example, if you bought a marketing list from another company, you will not be able to satisfy this requirement since you will not have obtained the details as a result of a sale or negotiations for a sale.
• the messages are marketing your similar products or services – the court will look here at what a person would ordinarily expect to receive from you based on its past interactions with you, and
• the individual concerned is given an opportunity to refuse the marketing when their details are collected and is given another opportunity to do so in every future message.

If these conditions have been met, you will not need to demonstrate prior consent from each recipient before sending e-mail marketing material. 

If these conditions are not met, the law says you should not send unsolicited e-mails without prior consent.

This may create difficulties for companies that use text messaging for direct marketing where they are limited to a maximum of 160 characters. 

However this is not an insurmountable difficulty; in particular it may be possible to provide an opt out mechanism by way of a short code, provided that the short code does not attract a premium charge and is valid at the time the message is sent.

Failure to comply with these requirements could lead to the Information Commissioner launching an investigation against you. 

The Information Commissioner has been very active recently in taking steps against companies who make unsolicited phone calls, but to date has not been so active in respect of e-mail marketing. 

This may change.  Ultimately, an enforcement notice issued by the Information Commissioner can make you criminally liable.

An alternative, as Mr Dick has demonstrated, is for an aggrieved individual just to go straight to the small claims court. 

The question is, would you want your company to be only the second case in the UK to go to court?

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For further information contact Justin Harrington, Morgan Cole, 029 2038 5385 at justin.harrington@morgan-cole.com