Renault UK Ltd v Fleetpro Technical Services Ltd & Anor is an interesting case. It confirms that fraudulent misrepresentations can be made to a machine such that, if loss is suffered as a result, a claim in damages can be brought.

The facts

The parties had entered into an agreement under which members of the British Airline Pilots Association were able to purchase new Renault cars at a discount. The orders were placed by Fleetpro through one of Renault's dealers who entered the order and code into Renault's computer system. The discount was then triggered automatically without any reference to, or consideration by, a Renault employee.

Renault alleged that Fleetpro had placed over 200 orders on behalf of individuals who were not entitled to participate in the scheme but whom Fleetpro had falsely represented were so entitled. As a result Renault alleged it had suffered loss, being the discount wrongly allowed on the erroneous basis that the scheme applied.

Fleetpro argued that any representations had in fact been made to the dealer and not to Renault who could not therefore have relied upon them. They also alleged that Renault were aware that the scheme was being misused and turned a blind eye to it and therefore suffered no loss.

The court's view

The court held that:

• The false representations had in fact been made to Renault albeit via its dealer.
• Fraudulent misrepresentations could be made to a machine if the machine was set up to process certain information in a particular way when it would not have done so if the correct information had been given. The misrepresentation was made to Renault when its computer system was told to process a particular transaction as one to which the discount for the scheme applied when in fact it did not.
• Renault had found out about the misuse of the scheme, had closed its eyes to it and therefore could not be said to have relied on any misrepresentations from the date of that knowledge.
• Although Renault potentially had a claim for the loss suffered over a short period of time, it had actually suffered no loss. None of the vehicles had been supplied to the dealer at less than cost and Renault had made a profit on each vehicle. Vehicles were produced to order and Renault could not show that but for the misrepresentations, it would have sold the vehicles ordered by Fleetpro elsewhere at list price.

Comment

This decision is important as it confirms that fraudulent misrepresentations can be made to machines, as well as to individuals, acting on behalf of a party. This will be good news for all who run similar automated discount schemes. However, it is also a reminder that to bring a successful claim a loss will have to have been suffered. This may be hard to prove if vehicles are only produced to order and where a blind eye has been turned to misuse of the scheme.

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This published article may contain information of general interest about current legal issues, but does not give legal advice.