Identity of lenders in peer-to-peer lending platform protected by Chancery Appeals Court

In Andrew Milne v Open Access Finance Ltd [2020] EWHC 1420 (Ch) the Court rejected an appeal against the making of a representative order under CPR r. 19.6 but allowed the appeal challenging the identity of that representative.

It is a good example of where an overly aggressive letter of claim gives the Judge cause for concern with regards to the motives of the Claimant. The Judge decided to exercise his discretion to make a representative order to protect the identities of over 600 lenders from being disclosed to the Claimant. Threats in the letter of claim to destroy the First Defendant’s business and pursue large additional claims against the lenders directly  gave the Chief Master sufficient concern to consider it appropriate for the representative order to be made.

The Case

The Claimant issued legal proceedings against the Defendant, who operated a peer-to-peer online lending platform, seeking damages for alleged breaches of FCA regulations, misrepresentation, unjust enrichment and relief under section 140B of the Consumer Credit Act 1974 (“CCA“) (unfair relationship). The mean average of the loans across the lenders was just £241.46. The Claimant wanted to join all lenders as Defendants but could not do so because the Defendant would not disclose their identities. He applied for disclosure under CPR r.31.

The Chief Master held that the application for disclosure was misconceived as the Claimant was seeking information not documentation. He held that the obvious answer to the application and to the Defendant’s concerns was to make a representative order so the Defendant could act as representative for all lenders (although neither party had requested that). He was satisfied that the Defendant and the lenders had the same interest.

The Claimant appealed. The Honourable Mr Justice Fancourt gave permission to appeal on two grounds; (1) there was reasonable argument about whether the statutory provisions of the CCA enabled the Court to make a representative order at all; and (2) if they did whether it was appropriate for the Defendant rather than one of the lenders to be the representative.


The Appeal Court was satisfied that the Chief Master had the right to make a representative order and that the statutory provisions of sections 140B(8) and 141(5) CCA would not alter that right. Furthermore, the Judge hearing the appeal had “considerable sympathy” with the Chief Master’s reasons for making the representative order.  The 29 page letter of claim that the Claimant sent to the Defendant was particularly aggressive and it was understandable that it caused concern for the Chief Master.

However, the Appeal Court allowed the appeal against the identity of the Defendant as representative for the lenders. It was held that the Chief Master was wrong to find the Defendant and the lenders had the same interest due to a significant risk of a conflict of interest between them. Although the Defendant had acted as the lenders’ agent in transacting and organising their business interests, the position was not the same in the litigation in which the Defendant and the lenders had their own distinct interests to protect, particularly relating to issues of settlement and protection of each business. Therefore, the role of the Defendant as representative was ordered to be substituted for one of the individual lenders.


Scott Nodder