What are the losses being claimed? - Claims include a contribution towards the “heads of damages,” made up of time, administration, security plus the cost of any goods not recovered or not fit for resale. Time is claimable at the true cost to the business, which includes, salary, NI and pension contributions and any other staff benefits paid. Time claimed is for the loss prevention department deployed to detect wrongful actions and protect the goods and the cost of other personnel diverted from their duties dealing with wrongful actions and all necessary associated tasks. There is a contribution towards administration costs, overall security costs and the cost of general disruption to the business. Sometimes recovered goods cannot be resold due to damage or health and safety laws. Certain cosmetic and medical items cannot be put back on the shop floor. Also certain items like chilled or frozen foods may not be offered for resale if too long out of chilled cabinets.
Why does it cost so much? – The cost of crime to a business is vast. The cost of loss prevention measures is only incurred by a business because people steal and commit other wrongdoings. If no one stole these costs would not be necessary. Loss prevention personnel’s time is one element of contribution sought. There are other necessary tasks undertaken after a person has left the store, including paperwork and reporting procedures, arranging inspection of goods, and authority for replacement back to stock and accounting to management. Further, other personnel such as administrative staff, shop floor staff and management are also engaged on these procedures diverting them from the profit generating activities for which they are engaged and paid.
Our clients also invest millions of pounds on security systems and technology which is necessary to enable detection of wrongdoing, and the lawful processing thereafter. Courts readily award retailers a contribution for such costs.
The item was only a few pounds and they got it back, so why is amount claimed so much? - Our client’s losses are no more or no less because of the value of the item. The same minimum set of processes and procedures had to be undertaken, at the same considerable cost. The cost of the item is only included in the claim if the item is not recovered or not fit for resale.
It is the security guards job, he would have been paid anyway - The security guard did indeed do the job he is paid to do, however, he is only employed because people steal, defraud or commit other wrongdoings. If people did not commit wrongdoings he would not be needed. When a person is caught the law allows for some of the costs to be passed to the wrongdoer.
Why is a contribution sought? You have to break down every element of the claim - The business bringing the claim is required to proceed its case in a proportionate manner. Often with the value of the claim, it would be disproportionate to spend more time and cost in calculating every minute of time which each member of staff spent undertaking each of the tasks; the additional time when Police are involved: and to calculate the costs of each unit of electricity, equipment usage costs, paperwork, photocopying, telephone calls, etc; and to calculate pro rata a contribution towards CCTV, its maintenance, tags and antennae and other security equipment for every case. If businesses were to do this, the full amount would have to be sought to make the costs viable. A business knows in general terms, the minimum types of work it has to undertake, personnel numbers involved and the time it takes, which typically costs between £300 and £500 per incident. More complex incidents, those involving juveniles, more than one person, those with violence or abuse, extended waiting time for the Police, cost considerably more. Provided the amount being claimed does not exceed the actual losses, a contribution approach is lawful.
- Initial surveillance (usually security)
- Surveillance by CCTV operator
- Apprehension process
- Procedure to inform store/duty manager
- Interviewing person(s)
- Sitting in and/or or taking notes at interview
- Identity checks / photos
- Initial report and liaison with the police
- Waiting with person(s) until police arrive
- Liaison with the police if involved
- Examining goods to establish if fit for resale
- Recording condition of goods/re-tagging/re-pricing
- Returning goods to shop floor where fit for resale
- Recording and disposing of goods not fit for resale
- Reviewing CCTV
- Copying CCTV
- Witness statement preparation
- Recording of evidence seen on CCTV
- Record event internally
- Discussion with store manager as to appropriate next action
- Record for security providers records
- Reporting to crime partnerships/town centres
- Notifying store/duty manager of outcome
- Collating paperwork
- Concluding incident
How was the contribution amount calculated? – The contribution was calculated as a sufficient amount towards the actual costs to act as a deterrent to further incidents.
You can’t use a fixed rate it is not lawful - The fixed rate applies to the compensation amount sought and not the claim value (not every incident could possibly cost exactly the same), which is lawful and ensures the claim is not disproportionate. Rather than seek the full extent of their losses, businesses seek a contribution towards them. This is an acceptable means of streamlining the process of recovery, thus making it less expensive for both the business and the wrongdoer. Retailers bear the remainder of the losses they opt not to recover.Back To List