1. The Respondent denies that it is liable to the Claimant as pleaded or at all.
2. The Respondent is a mobile telecommunications network operator that enters into Service Agreements with its customers to enable its customers to access its network. The Claimant is one such customer of the Respondent.
3. Access to the Respondent’s network is granted to the customer by way of the issuance to the customer of a SIM card which is issued subject to the Respondent’s then applicable conditions for telephone service.
4. The Claimant has been a customer of the Respondent’s since 26 September 2012. Upon connection, the Claimant was registered as a consumer and
allocated the account number 19546576 (“the Account”) and the mobile telephone number 07429 588086 (“the Mobile Number”), which is currently active on the Account.
5. The Claimant entered into the Service Agreement (“the Agreement”) via one of the Respondent’s retail stores. The Claimant was made aware that the Agreement was subject to terms and conditions, which were offered to the Claimant prior to entering into the Agreement and were available for viewing on the Respondent’s website. The Claimant would have signed an agreement form incorporating the applicable terms into the Agreement and he would have been provided with a copy of the agreement form and the terms and conditions prior to leaving the store.
6. The Respondent maintains a paperless environment with regards to Service Agreements entered into with its customers but does not retain a copy. However, the Respondent maintains a record of the applicable terms and conditions that govern each Service Agreement entered into.
7. At Schedule 1 attached hereto is a copy of the Terms and Conditions for Telephone Service and Equipment – Conditions Version 58. The Respondent submits that such terms and conditions relate to the original terms and conditions to the Agreement.
8. At Schedule 2 attached hereto is a copy of the amended terms and conditions – Conditions Version 58C, subject to the Agreement as of the 26 March 2014.
9. The Respondent submits that this dispute, as per the Claimant’s application, arises from the Respondent’s amendment of the terms of the Agreement between the Claimant and Respondent. The amendment changed the circumstances in which a price rise gives the Claimant an automatic right to terminate the Agreement, without paying a cancellation charge. The amendment was introduced in light of comments expressed by Ofcom regarding the Respondent’s terms and conditions - Condition Version 58 (at Schedule 1) with the intention of increasing certainty for consumers and is to the Claimant’s benefit.
10. As to the substance of this complaint, the Respondent’s position is that it has a general right to change the terms of the Agreement, as per the terms and conditions exhibited at Schedule 1. That right is subject to the right of the Claimant under the terms of the Agreement and the regulatory scheme to terminate the Agreement if the change is of material detriment to the Claimant. However, in the present case, the change is not of detriment to the Claimant at all, alternatively any detriment is marginal and not material. On the contrary, it is to the Claimant’s benefit, and accordingly there is no right of termination.
11. The Respondent submits that they also consider that this dispute falls outside CISAS’ remit on the grounds that (i) it does not fall within CISAS rule 2a; and/or (ii) it falls within CISAS rule 2b.
12. This response addresses the following:
a) The change to the Agreement;
b) The Respondent’s right to change the terms of the Agreement;
c) The Claimant’s right to terminate following a change if the change is of material detriment;
d) Why the change is not of material detriment to the Claimant;
e) Why the dispute falls outside CISAS’ remit and/or is not appropriately resolved by CISAS.
THE CHANGE TO THE CONTRACT
13. The Agreement provides for a specific right for the Respondent to vary its charges for services provided under the Agreement. The change about which complaint is made concerns the terms which provide for when increases to the Claimant’s £36.00 price plan (the main recurring monthly charge) gives a right to terminate without paying a cancellation charge.
14. The Respondent confirms that between the 29 January 2014 and 14 February 2014 the Claimant was notified by SMS as to the amendment of the original terms and conditions (at Schedule 1) to the amended terms and conditions (at Schedule 2). Following the 14 February 2014 the SMS delivery data was then analysed by the Respondent and letters confirming the amendments were then sent out to the registered addresses of any customers whose notification SMS had either failed or not been delivered. The Respondent confirms that the sending of the above said notification letters to the remaining un-notified customers was completed by the 21 February 2014. The Respondent submits that this entire process was of course in compliance with the relevant notice requirement as per the original terms and conditions.
The Contract prior to the Change
15. The Respondent is referred to the terms and conditions at Schedule 1, CVN58.

16. Prior to the changes in question, point 7.1.4 of the Contract provided:
7.1.4. We can increase any Price Plan Charge. We will give You Written Notice 30 days before We do so. The change will then apply to You once that notice has run out.
17. The Agreement further provided that the Claimant has a right to terminate the Agreement without paying a cancellation charge where a price increase notified under point 7.1.4 was of material detriment to the Claimant (point 7.2.3.2) or exceeded the rate of inflation (point 7.2.3.3).
7.2.3. A Cancellation Charge won’t apply if You are within the Minimum Term and:
7.2.3.2. You are a Consumer and the change that We gave You Written Notice of in point 2.11.2 or 7.1.4 above is of material detriment to You and You give Us notice to immediately cancel this Agreement before the change takes effect; or
7.2.3.3. The change that We gave You Written Notice of in point 7.1.4 is: (i) an increase in Your Price Plan Charge (as a percentage) higher than any increase in the Retail Price Index (also calculated as a percentage) for the 12 months before the month in which We send You Written Notice and You give Us notice to immediately cancel this Agreement before the change takes effect.
17. Point 7.2 is referred to below as “the Old Term”.
18. The effect of point 7.2.3.3 in CVN58 was that the Claimant would only have a right to terminate the Agreement if the price increase was higher than the retail price index (“RPI”).
The Agreement after the Change
19. The Respondent refers to the terms and conditions as at Schedule 2, CVN58C.
20. The revised Agreement provides as follows:
7.2.3.3. We have given You Written Notice of an increase in a Price Plan Charge under point 7.1.4 and (i) the increase in Your Price Plan Charge (as a percentage) is higher than the annual percentage increase in the Retail Price Index (RPI) published by the Office for National Statistics (calculated using the most recently published RPI figure before we give you Written Notice under 7.1.4); and (ii) You give Us notice to immediately cancel this Agreement before the change takes effect.
21. The effect of this term (“the New Term”) is that the Claimant has a right to terminate the Agreement if the price increase is higher than RPI, calculated using the most recently published RPI figures.
22. The clause specifically refers to RPI and not Consumer Price Index (‘CPI’). CPI and RPI are measured in different ways and takes into account different factors in determining the figure for the relevant month. CPI figures can indeed be higher than the RPI figures. The Respondent has historically relied only upon the RPI figure and not CPI. The Respondent’s business decision to rely solely upon the RPI as a measure creates certainty to the Claimant as to which
measure will be used. In any event, the Respondent submits that even if the CPI figure had been used as a measure that an increase by a CPI measure would not be regarded as an increase which would constitute a material detriment to the Claimant.
23. This change increases certainty for customers and reduces the scope for disputes regarding whether a price change gives rise to a right to cancellation.
The Respondent’s right to change the terms of the Agreement
24. The Respondent is entitled to revise its contract terms pursuant to point 2.11 of the Agreement, which provides as follows:
2.11. We will make a copy of Our current version of these term and conditions available on Our website. We can change these terms and conditions for any good reason, for instance, if We want all customer on the same conditions. We will tell You about the change beforehand, as explained here.
2.11.1 We will make a copy of Our current version of these terms and conditions available on Our website. We can change these terms and conditions for any good reason, for instance, if We want all customers on the same conditions. We will tell You about the change beforehand, as explained here:
The Claimant has a right to terminate only if the change is of material detriment
25. The Agreement further provides that where a change notified under point 2.11.1 is of material detriment to the Claimant, the Claimant has a right to
terminate the Agreement without paying a cancellation charge. However, if the change notified is not of material detriment and the Claimant is within their minimum term, the Claimant does not have such right of termination.
26. Points 2.11 and 7.2 provide (so far as material) as follows:
2.11.2. If You are a Consumer and the change of terms and conditions is not of material detriment to You or You are not a Consumer, We will send You Written Notice 30 days before the terms and conditions are due to change. The new terms and conditions will automatically apply to You once that notice has run out.
2.11.3. If You are a Consumer and the change is of material detriment to You, We will send You Written Notice 30 days before the terms and conditions are due to change. The new terms and conditions will apply to You once that notice has run out, unless You terminate Your Agreement with Us within that notice period. If You do this You won’t have to pay any Cancellation Charge that would otherwise apply, see point 7.2.3.2.
7.2. Your termination rights
7.2.1. You can give Us notice to terminate this Agreement, to take effect on or after the end of the Minimum Term. However (except as set out in point 7.2.3 and 7.2.4) if, in our total discretion, We accept notice from You to terminate this Agreement within the Minimum Term, You will have to pay Us a Cancellation Charge and, if applicable, the Additional Commitment Service Cancellation Charge.
7.2.3. A Cancellation Charge won’t apply if You are within the Minimum Term and:
7.2.3.2. You are a Consumer and the change that We gave You Written Notice of in point 2.11.2 or 7.1.4 above is of material detriment to You and You give Us notice to immediately cancel this Agreement before the change takes effect; or
27. Point 2.11 implements General Condition 9.6, imposed by Ofcom on Communications Providers under s.45 of the Communications Act 2003, which provides for Communications Providers to give subscribers one month’s notice of “any modifications likely to be of material detriment” and to allow subscribers to withdraw from the contract without penalty.
The Change is not of material Detriment
28. The Change is not of material detriment for the following reasons.
29. Under both the Old Term and the New Term, the Claimant may cancel, without incurring a cancellation charge, if the price increase notified by the Respondent exceeds the rate of inflation as measured by RPI. In substance, the Claimant’s rights of cancellation have therefore not been affected and the Claimant has suffered no detriment whatsoever.
30. On the contrary, the effect of the changes is to benefit the Claimant. The changes make clear and certain the specific published measure of inflation which may be used for the purposes of this comparison. Out of date and potentially confusing references to other statistical measures of inflation have
been removed. The changes therefore will enable the Claimant to identify when a right of cancellation arises.
31. Alternatively, if and to the extent that the Claimant has suffered any marginal detriment, such detriment is not material.
31.1. The only circumstance in which it could be said that the Claimant has suffered detriment would be if it were established that the Old Term allowed the Claimant to terminate, without incurring a cancellation charge, in circumstances where the price rise notified was less than RPI, but higher than some other statistical measure of inflation.
31.2. In order to demonstrate that the change was of material detriment, the Claimant would need to (i) identify such other statistical measure of inflation which it is said would qualify under the Old Term; (ii) identify the difference over the period of the Claimant’s minimum term between price rises which would be calculated according to RPI and price rises which would be calculated according to the alternative measure of inflation and (iii) establish that the difference between such price rises qualifies as material detriment under point 7.2.3.2.
31.3. Further or alternatively, it is submitted that the difference, over the course of the Claimant’s minimum term between any two measures of inflation which would qualify under point 7.2.3.2 is not sufficient to be material.
31.5 Further or alternatively, it is submitted that the difference between any two measures of inflation which would qualify under point 7.2.3.2 is not
sufficient to be material when applied to the amount of the Claimant’s bills over the course of the Claimant’s remaining minimum term.
31.6 In particular and by way of illustration, a historic comparison of RPI to CPI shows that the difference between the two is not typically material the following table sets out, for each of the last 24 months:-
(A) the percentage change in CPI over the previous 12 month period;
(B) the percentage change in RPI over the previous 12 month period;
(C) the difference, in percentage points, between the percentage change in CPI and RPI over the previous 12 month period; and
(D) the average of the difference in the percentage changes in CPI and RPI, calculated over the 24 months period1
Month
A. % change in CPI over previous 12 month period
B. % change in RPI over previous 12 month period
C. Difference in percentage points
Mar 2012
3.5
3.6
0.1
Apr
3.0
3.5
0.5
May
2.8
3.1
0.3
Jun
2.4
2.8
0.4
Jul
2.6
3.2
0.6
Aug
2.5
2.9
0.4
Sep
2.2
2.6
0.4
Oct
2.7
3.2
0.5
Nov
2.7
3.0
0.3
Dec
2.7
3.1
0.4
1 The figures in this table have been obtained http://www.ons.gov.uk/ons/rel/cpi/consumer-price- indices/february-2014/consumer-price-inflation-reference-tables.xls.
Jan 2013
2.7
3.3
0.6
Feb
2.8
3.2
0.4
Mar
2.8
3.3
0.5
Apr
2.4
2.9
0.5
May
2.7
3.1
0.4
Jun
2.9
3.3
0.4
Jul
2.8
3.1
0.3
Aug
2.7
3.3
0.6
Sep
2.7
3.2
0.5
Oct
2.2
2.6
0.4
Nov
2.1
2.6
0.5
Dec
2.0
2.7
0.7
Jan
1.9
2.8
0.9
Feb 2014
1.7
2.7
1.0
D. Average difference between % change in CPI and RPI over previous 12 month period
0.5
31.7 Accordingly, applied to a typical monthly bill of £30, the average difference between the maximum price rise under the New Term (i.e. a price rise which does not trigger a right to termination) and the maximum price rise under the Old Term, calculated by reference to CPI would be 0.5% x £30 per month = 15 pence per month. Even taken over the longest possible period of 24 months2, the total detriment would amount to only £3.60 compared to total bills of £720 over the period. It is likely that the detriment would be less than this. It is submitted that such a small difference is not capable of being material. Further, it is difficult to envisage any detriment which could be less material and if this change were found to be material, it would deprive the materiality condition of any meaning whatsoever.
2 24 months is the longest initial commitment period permissible under General Condition 9.4

THE DISPUTE FALLS OUTSIDE CISAS’ REMIT
32. The dispute cannot be settled by CISAS under Rule 2 of the CISAS Rules insofar as it concerns whether the Claimant is entitled to cancel the Agreement by reason of the Respondent’s amendments to terms 7.1.4 and/or 7.2.3.3 terms and conditions on the grounds that those amendments are modifications likely to be of material detriment to the Claimant. The Material Detriment Issue does not relate to any of the matters set out in Rule 2a and/or involves a complicated issue of law.
33. The Material Detriment Issue does not relate to any of the matters set out in Rule 2a.
33.1. Bills: It does not relate to any bill issued by the Respondent to the Claimant.
33.2. Customer Service: It does not relate to the quality of customer service provided by the Respondent to the Claimant.
33.3. Communications Services: For the reasons further set out below, the reference in Rule 2a to “Communications services provided to customers” relates to the physical provision of electronic communications services and/or does not relate to regulatory issues such as the Material Detriment Issue. Rule 2a is intended to implement General Condition 14.5 (“GC 14.5”) which requires the Respondent to “implement and comply with a Dispute Resolution Scheme, ... for the resolution of disputes ...in relation to the provision of Public Electronic Communications Services.” Electronic Communications Services are defined in s.32 of the

Communications Act 2003 to mean “a service consisting in, or having as its principal feature, the conveyance by means of an electronic communications network of signals”. That indicates that the focus of the dispute resolution scheme is on the service actually provided to customers.
34. Further or alternatively, the Material Detriment Issue constitutes a complicated issue of law.
34.1. A proper resolution of the case would require CISAS to consider (i) the proper construction of the Old Term, as a matter of contract; (ii) the proper construction of the New Term, as a matter of contract; (iii) the proper construction of the term “material detriment”; and (iv) whether, in light of those matters, the change from the Old Term to the New Term was of such material detriment. Each of points (i), (iii) and (iv) involves complicated issues of law.
34.2. As noted above the proper construction of the Old Term may not be easy to establish. It does not make clear which statistical measures of inflation may be used for the purposes of comparison.
34.3. Further, the meaning of material detriment needs to be established both as a matter of contractual construction and by reference to the regulatory context. The term is not defined explicitly in the Agreement or in GC9.6. The fact that Ofcom has recently published guidance on the issue of material detriment in respect of price change clauses indicates that absent such guidance, the issue of material detriment is unclear; and
that the considerations applicable to determining material detriment can be complicated.
34.4. The application of the material detriment test to the change of terms is doubly complex. It is not sufficient simply that it is theoretically possible that the change could be of some detriment to the customer. Rather it is necessary that the Claimant identify the degree to which the Old and New Terms would differ, if applied to him, and to establish that that difference is material.
35. For the reasons stated above the Respondent denies that the Claimant as at all entitled, whether contractually or otherwise, to terminate his Agreement without charge, either for the reasons as indicated within his application or any other such reason. Therefore, the Respondent submits that the Claimant is subject to the standard contractual termination clauses as per the applicable terms and conditions.
36. The Respondent notes that the Claimant has made no complaint as to customer services and in any event, the Respondent submits that the Claimant was provided with a good level of customer services at all times and that any dissatisfaction on the part of the Claimant simply stems from the fact that the matter was not resolved as he had hoped, which in any event related to a proposed remedy that he was not entitled to. The Respondent confirms that it has responded to the Claimant’s complaint at all times, clarifying its position regarding the above. Attached hereto at Schedule 3 is a copy of correspondence between the parties.
37. The Respondent submits that it will provide the Claimant with a Port Authorisation Code (“PAC”) to enable the Claimant to transfer his number to another provider and to cancel the Agreement upon request, however it is the Respondent’s position that the Claimant will remain liable for a cancellation charge upon cancellation of the Agreement, currently the sum of £143.64, reducing on a daily basis.
Remedies Sought by the Claimant
38. As set out above, the Respondent denies that it is liable to cancel the Agreement without payment of the relevant cancellation charge for the reasons set out above. A PAC code can be provided to the Claimant however he will remain liable for the cancellation charge as set out above.
39. In respect of the Claimant’s request for an unlocking code, the Respondent submits that handsets sold on the Respondent’s network are ‘locked’ for use solely on the Respondent’s network by the manufacturers of the handsets. The Respondent avers that the unlocking codes which will ‘unlock’ most handsets from the Respondent’s mobile network, to enable the handset to be used on any other applicable mobile network, are provided by the manufacturer of the handsets and not by the Respondent. The Respondent submits that such is standard practice for all mobile network operators and denies, if such is alleged, that such practice is in breach of Agreement, statute or otherwise.
40. Whilst in accordance with Clause 14 the Device falls outside of the Agreement, and notwithstanding the above, the Respondent submits that it can request from the manufacturers the unlocking codes. The Respondent submits that it does not
offer a guarantee that that all handsets can be unlocked as such is outside of the Respondent’s control or knowledge as unlocking codes are unique to each individual IMEI number of a particular handset and information regarding whether or not a particular handset can be unlocked can only be provided by the manufacturer.
41. The Respondent confirms that it has no record of any request from the Claimant for the provision of an unlocking code at any time or at all. The Respondent confirms that there is no contractual or legal obligation to provide a handset unlocking code and the Claimant is therefore put to strict proof as to his contention in relation to the remedy sought. The Respondent submits in any event that the Claimant has provided no evidence which confirms that a handset would be unlocked at a later date and therefore, the Claimant has no grounds to his claim.
42. The Respondent denies, if such is pleaded, that any failure to provide an unlock code is a contractual breach of the Agreement or that such renders the handset inoperable and the Claimant is hereby put to strict proof.
43. The Claimant claims the sum of £100 in compensation. The Respondent denies that the Claimant is entitled to compensation in the sum of £100 as pleaded or at
all. If the Claimant had suffered actual loss he would have pleaded that damage as a quantified sum and furthermore provided evidence to support such a claim. The Claimant has not done so and as a consequence is not entitled to any compensation. The Claimant is hereby put to strict proof as to his purported loss.
44. The Respondent submits that they have acted well within the parameters of their terms and conditions and entirely in compliance with any obligations and therefore, any liability to the Claimant is entirely denied.
The Respondent believes that the facts stated in this form are true. I am duly authorised by the Respondent to sign this statement.
Dated the 1 May 2014
Helen Young Legal Assistant
For and on behalf of the Respondent whose address for service is at:
EE Limited
Legal Department Trident Place Mosquito Way Hatfield Hertfordshire AL10 9BW