Hays pays £5.5m after mail monopoly breach

Hays, the support services group, was yesterday forced to pay £5.5m in damages and costs to settle a court action brought by Consignia in defence of its mail monopoly.

Consignia took Hays to court last June claiming that Hays' mail and express delivery division had broken the law by poaching customers in the financial services and travel industries. Hays was delivering tickets for travel agents and insurance cover notes from insurance company headquarters to brokers.

Hays has now been licensed by the postal regulator Postcomm to carry out these activities. But Consignia argued in court that it had breached the law between March 2001, when the Postal Services Act was introduced, and September of last year when it obtained its licence.

About £1m of the settlement covers Consignia's costs and the rest is damages. Neil Tregarthen, the managing director of Hays DX, said the disputed deliveries represented less than 5 per cent of a business worth £55m a year. But he added: "With any litigation, there is always a point where you have to reach a commercial judgement. Having an orderly market and a sensible working arrangement with Consignia is important."

Consignia's managing director of strategy and business development, Stuart Sweetman, said the action demonstrated that it would protect its ability to offer a universal service when other operators infringed its rights.