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BG to pay pounds 200,000 in e-mail libel case

BRITISH GAS - now known as BG - is to pay out more than pounds 200,000 in one of the first e-mail libel cases to be settled in Britain.

The settlement, which includes pounds 101,000 paid into court by BG and about pounds 125,000 in legal fees, follows an internal memo sent to 10,000 staff telling them to have "no dealings" with a company called Exoteric Gas Solutions (EGS).

The memo was sent to all staff at Transco, BG's subsidiary gas connections and supply business, following a complaint that EGS had used confidential material to win contracts in the newly liberalised gas market. The case not only reinforces the legal status of e-mail but questions the true competitiveness of the gas industry.

Andrew Duffield, EGS's owner, had worked for 22 years at British Gas, rising to head of engineering before he left to set up his own business in 1997 to compete with Transco after the liberalisation of the pounds 3.4bn gas supply market.

His lawyer, Simon Gallant, said after yesterday's court hearing: "The case highlights the pitfalls of using e-mail without due care. However, while this is a victory for our clients, the unusual absence of an apology from the defendants does reflect that there are still a number of issues to address before our clients can be said to operate in a truly liberalised marketplace."

Mr Duffield denied using any confidential material to win contracts and claimed that the original complaint, which had led to the memo, had in fact been made about Transco.