The sprawling legal arguments around motor finance compensation claims may end up in another Supreme Court appearance. Lenders Black Horse and Close Brothers have lodged applications for permission to appeal a Court of Appeal decision handed down in July.
In Black Horse Limited, appeal judges allowed mis-sold car finance cases to be grouped together as one class action, meaning that thousands of claims could be conveniently dealt with under eight ‘omnibus’ claims.
The result was a boon for the law firms and claims management companies who have borrowed heavily to invest in preparing these cases and would benefit from being able to group together.
The defendants argued in the lower courts that individual cases required all of the facts and circumstances to be taken into account.
In one set of claims alone, these involved 118 different dealers, dealer contributions ranging from £0 to £4,440, commission ranging from £100 to £2,000 and interest APRs varying from 2.88% to 22.31%. There was no ‘series of transactions’ that could make it possible to group them together easily, it was submitted.
Read more
Neither defendant has commented on the latest application, which will determined by the Supreme Court in the coming weeks.
The Supreme Court ruled last year on the issue of mis-selling of motor finance by lenders and car dealers. Two of the appeals from dealers were upheld, but the court found that one claimant was entitled to succeed because of an unfair relationship between him and the finance company.
That left the door open for lawyers to amass thousands of potential clients, only for the Financial Conduct Authority to launch its own compensation scheme. The scheme is currently on hold while the courts hear challenge from both lenders and a consumer group about its fairness.
Parallel to those proceedings, firms have pursued the option of bringing omnibus claims and have said they will continue to act in spite of the potential for a further Supreme Court hearing.
Kevin Durkin, solicitor-advocate and director at claimant firm HD Law, said: ‘Black Horse and Close Brothers’ decision to seek permission to appeal from the Supreme Court, to overturn the ruling that allows drivers to bring their claims together is not in consumers’ interests. It is a deliberate attempt to delay the process and make it harder for drivers to be able to seek the compensation they are owed.
‘However the good news for drivers is that nothing changes today. Until the Supreme Court decides whether to hear the case, the Court of Appeal’s ruling stands as law and claims can continue to be brought with the assistance of a specialist law firm. The court route remains open, just as it has been throughout the delays to the FCA’s redress scheme, which is still tied up in judicial review.’
No comments yet