GSM Gateways Francovich decision upheld in Court of Appeal

06 Nov 2014

The Department for Culture Media and Sport has successfully defended an appeal brought by six GSM Gateway operators in the Court of Appeal. The claimants had brought Francovich damages claims for over £400million, alleging that the UK’s restriction on the commercial use of GSM Gateways was incompatible with, in particular, the EU Authorisation Directive. Mrs Justice Rose had found against the claimants in a decision that can be found here Recall Support Services v Secretary of State for Culture Media Sport. She held that DCMS was justified in relying on public security concerns in imposing and maintaining the restriction for multi-user commercial gateways (COMUGs), albeit not in relation to one minor issue on single-user commercial gateways (COSUGs). In relation to all GSM Gateways Rose J also found that there was either no or no sufficiently serious breach of EU law in any event and dismissed all claims.

The Claimants appealed on the basis that the High Court had erred in its interpretation of Article 5 of the Authorisation Directive which they contended did not permit the UK to maintain the commercial use restriction on grounds of public security. They further contended that the UK had not laid a proper basis in domestic law to entitle the UK to restrict the rights conferred on Gateway operators. Also, that such breach was sufficiently serious to justify damages.

Richards LJ, giving the leading decision of the Court of Appeal, rejected each of the grounds of appeal and upheld the judgment of Rose J in full. Thus, the Court of Appeal has held that the UK was permitted as a matter of EU law to maintain the commercial use restriction for COMUGs (and not COSUGs) and that this was properly provided for in domestic law. Accordingly the Court concluded that it could not be said that there was a manifest and grave disregard of EU law by the UK Government. Appeal dismissed.

Click here to read the full judgment of the Court of Appeal Recall Support Services v Secretary of State for Culture Media & Sport

Daniel Beard QC, Philip Moser QC and Brendan McGurk acted for the Respondent.