I SHOULD ADD:

I’ve written before how failed or inadequate regulatory remedies for consumers in the UK are opening the door to a relatively new type of remedy: the class action lawsuit.

Well, it turns out the case of the GMTV wrongdoing that at least one large law firm may be interested in taking the matter up against GMTV. The case is also of interest to experts advising the UK and Europe on the appropriate interplay between regulation and litigation. The basic question is: Can public regulation offer effective remedies on its own?

In the case of GMTV, Ofcom have acted and there is STILL a big pool of ill-gotten money just sitting there…

In my career, I once stepped in and litigated a matter that the FCC let drop, delivering a big monetary remedy for the U.S. government. Similar to Ofcom, the FCC had good intentions, but private enforcement is sometimes an excellent supplement to inadequate systems of public regulation. Plus, I had more aggressive lawyers!

Send lawyers, guns and money…

UPDATE TO MY POST OF 4 MAY 08:

The Mail on Sunday reports:

‘Media Secretary Andy Burnham has thrown his weight behind demands for television companies such as breakfast broadcaster GMTV to donate unclaimed proceeds from rigged quiz shows to charity.’

‘His intervention means there is now crossparty political support for the call to donate to charity any money unclaimed by viewers who were entitled to compensation.’

‘GMTV refuses to say how many viewers have applied for compensation. Though it has donated £250,000 to charity and entered cheated callers into new prize draws at a cost of £2.5m, it is set to retain the bulk of its profits from the rigged quizzes.’

**** 4 May 2008 post follows ****

On Friday, Ofcom denied my FOI Act request to uncover how much money GMTV refunded to victims of its wrongdoing. Ofcom stated that the information was subject to exemption 44 under the FOI Act and also stated ‘Ofcom have not conducted any follow up and therefore we do not hold any information on this.’

Yikes. No follow-up? Everyone should keep in mind the following outline of what happened:

But when Ofcom testified before Parliament on 22nd April — and was asked whether it was too soft on GMTV — two things emerged:

1. Ofcom said it would provide Parliament with the amounts refunded to victims by GMTV. (This contradicts the subsequent denial of my FOI Act request)

and

2. Ofcom stated that the maximum fine it could have levied against GMTV was 2.7 million GBP. Surely, this cannot be correct? The violations took place over multiple years. Surely Ofcom could have imposed a fine for each year of the violations? Based on my uninformed reading of the Communications Act — maybe I have it wrong — it looks like Ofcom could have fined GMTV up to 5 percent of turnover for each financial year of the violations.

I hope Ofcom correctly specify to Parliament the maximum amount it could have fined GMTV.

Ofcom still have to make a full account of their actions in this GMTV matter. It might be too harsh to say Ofcom were soft on GMTV, but it looks clear to me that Ofcom mismanaged the handling of this matter. As I have said before Ofcom should have held its fine in abeyance pending the results of GMTV’s refund efforts. Ofcom also apparently should have considered the maximum fine amount on a per-year basis instead of lumping the misdeeds and considering them as one problem.