Recent cases provide clarity but consumers lose out on agency provisions, say Jonathan Butters & Kevin Durkin
The “unfair relationship” provisions at ss 140A-C of the Consumer Credit Act 1974 (the Act) empower the courts to re-open credit agreements on the application of a debtor on the ground that the relationship between creditor and debtor arising out of the agreement is unfair to the debtor. The recent decisions of the Supreme Court in Plevin v Paragon Finance Limited[2014] UKSC 61, [2015] 1 All ER 625 and the Court of Appeal in Scotland v British Credit Trust [2014] EWCA Civ 790; [2014] All ER (D) 103 (Jun) have provided much clarity on the approach to claims under ss 140A-C.
In both cases the claimants took out loans which included additional advances to fund the purchase of PPI which was payable by way of an up-front premium. Both issued claims against the creditor on the basis that the intermediary who sold the PPI was acting “on behalf of” the creditor for the purpose of s 140(1)(c). In both cases the intermediary had become insolvent.
