Two recent court decisions could have wide significance for mass consumer financial mis-selling litigation in the UK:
- First, the Court of Appeal has recently permitted mass unfair credit relationship claims under s.140A of the Consumer Credit Act to be brought using the light-touch “omnibus claim form” route, setting a precedent that lowers a significant procedural hurdle to litigating large numbers of similar consumer claims together.
- Secondly, a very recent County Court decision suggests that s.140A claims are not (as previously thought) subject to the six year limitation period applicable to claims for breach of statutory duty under s.9 of the Limitation Act 1980. If followed this would potentially reopen large numbers of potential claims that would otherwise be time expired.
Taken together these decisions could point towards a more benign climate for s.140A and wider financial mis-selling claims as barriers to would-be claimants and the claims management firms (“CMCs”) and law firms that represent them are removed.
Angel: managing large numbers of similar claims
The first of these decisions arose from mass motor finance litigation involving over 5,000 claims issued on a handful of claim forms under CPR 7.3, which permits multiple claims on one claim form where they can be “conveniently disposed of in the same proceedings”.
While critical of many aspects of the claimant lawyers’ approach, the Court of Appeal upheld the use of this procedure and refused to require each claim to be issued separately, which it said would have been disproportionately costly and so likely to stymy many of the claims. The Court gave “convenience” its everyday meaning, and held that in this context it did not require that the claims could be tried together. “Convenient disposal” can encompass wider case-management benefits, including cost-efficiency, consistency of approach, proportionality, and saving of court resources. While the extent of common issues of law or fact across the claims was a relevant factor in assessing convenience, it was not of itself decisive.
The decision has significant implications for mass litigation, where individual claims are often modest in value and the process of litigating them alone against a resolute defendant is daunting. The “group litigation order” (“GLO”) regime, introduced to make mass claims more feasible, has withered on the vine due to restrictive threshold requirements to show sufficient commonality of issues. More claims that cannot meet those thresholds which may now be capable of being managed collectively.
The use of lead cases
Claims under section 140A remain fact-sensitive. Whether a credit relationship is unfair depends on all the circumstances of the particular relationship. It cannot necessarily be said that a common fact pattern, such as non-disclosure of commissions, will automatically render credit relationships unfair. So it is commonly said by defendant financial institutions that collective case management in s.140A claims is inappropriate.
Nonetheless, the Court of Appeal endorsed bespoke case management of the omnibus claims through the use of lead cases or preliminary issues, which can be selected to address recurring factual or legal issues. Even if the outcome of those cases will not formally determine every other claim, the court considered that it could provide useful guidance and encourage settlement of claims with similar characteristics. This approach could make litigating claims of this nature at scale significantly cheaper and easier.
However, aggregation does not remove the requirement for each claimant ultimately to establish an individual cause of action, and the courts have been critical of slipshod issuance of mass claims without proper investigation and verification of the claim population.
Berry: no statutory limitation period for section 140A?
Berry raises the different issue of what limitation period applies to s.140A claims. The case concerned a credit agreement entered into in 2005 and repaid two years later, with proceedings commenced many years later in 2023. Conventional wisdom was that s.9 of the Limitation Act 1980 relating to claims for breach of statutory duty applied, such that claims were time barred six years from the date of the breach of duty. Previous case law had suggested the gloss that the breach only arose when the credit agreement complained about was terminated, because any developing unfairness in the credit relationship was curable up to that point.
In Canada Square v Potter [2023] UKSC 41 the Supreme Court held that this primary limitation period for s.140A claims could be extended under s.32 of the Limitation Act where there was fraud or deliberate concealment of facts relevant to the claim.
In Berry, HHJ Glen upended that orthodoxy and held that no statutory limitation period applied to s.140A claims. The reasoning followed the Supreme Court’s approach in THG plc v Zedra Trust Company (Jersey) Ltd [2026] UKSC 6, which held that the unfair prejudice jurisdiction under s.994 of the Companies Act 2006 was not subject to s.9 of the Limitation Act. By analogy the court held that section 140A does not create a conventional statutory obligation, breach of which gives rise to a claim for a particular sum. Instead, it gives the court wide powers to assess whether the credit relationship was unfair and, if so, to select from the broad range of remedies available under section 140B.
The somewhat surprising result was that the section 140A claim was not subject to a statutory limitation period at all. The implication is that Potter decision was otiose, since there was no primary limitation period to extend using s.32 of the Limitation Act.
Delay may still matter
This does not mean that stale claims can necessarily be pursued indefinitely. The unfair relationship jurisdiction gives the court a wide discretion over both unfairness and remedy. HHJ Glen considered that delay could therefore remain highly relevant when the court decides whether relief should be granted and if so what relief.
Status of the decision
Berry is a County Court appeal decision and so is not binding on other courts (although it may be persuasive). The judgment itself recognised the significance of the issue and the desirability of appellate consideration. A leapfrog appeal to the Court of Appeal is anticipated. In the meantime however, it should be expected that some claimants rely on the reasoning of the decision to bring claims that would otherwise be time-barred.
The combined effect
These developments don’t alter the substantive legal requirements for s.140A claims. But they do go to two recurring practical constraints on pursuing consumer financial litigation at scale. Angel confirms that the courts can use flexible case-management techniques to deal with large populations of similar claims, even where each claim ultimately requires individual consideration. And Berry potentially increases the claims universe, and removes the need for older claims to be brought within the Potter test for concealment.
Both points require qualification. Aggregated claims still need to satisfy the convenience criteria. The absence of a statutory limitation period would not make delay irrelevant. Nonetheless they may affect how historic consumer finance disputes are identified, organised and litigated. For firms operating in this area, these are therefore important areas to watch — particularly any appellate consideration of the limitation issue raised in Berry.
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