The Court of Appeal has dismissed an appeal by car finance lenders against a decision to allow mass claims to be brought using omnibus claim forms in respect of non-disclosed DCAs on car finance.
Over 5,000 individuals had taken out finance from a variety of lenders to purchase cars. The claimants had brought claims under s140B(1)(a) CCA for repayment of monies they had paid under the credit agreements on the basis of an unfair relationship because the lenders had not disclosed commission payments to the car dealers. The particulars of claim set out how this was a beach of CONC.
The claims, brought in the County Court in Birmingham, were brought on the basis they raised a single common issue – whether CONC required disclosure of DCAs. But at some point an additional question about the principle of unfairness from non-disclosure was also introduced. The defendant lenders said that whether a failure to disclose gave risk to an unfair relationship had to be determined on the facts of each specific case, and that the conclusion in one case would not have any effect on how to determine another.
The circuit judge concluded that the necessary convenience test (the CPR 7.3 test that a claimant may use a single claim to start all claims which can be conveniently disposed of in the same proceedings) had not been met so it was not appropriate to use multi-claimant claim forms and therefore disaggregated the claims. He also said the best way forward would be for some of the claims to be pleaded out and tried. The claimants appealed, and the High Court found that the convenience test had in fact been met. The defendants sought permission to appeal against the orders the High Court judge had made and succeeded only on one ground – that the High Court judge may have failed to re-exercise the discretion properly when considering the convenience test.
At the appeal, much time was spent on looking at what, if any, common issues the claims might have. There were no pleaded factual parameters, so the debate on whether lead cases were desirable was largely hypothetical. The judge commented that the parties seemed determined not to cooperate. The court also needed to bear in mind that it could not stray into the territory of the issues for which leave to appeal had been denied, and the argument of the claimants that if the advantages of multi-claimant litigation were removed, the claims would be scattered all over the country, largely as small claims with fees being paid out of damages – so the argument was that the reality would be that many claimants would not want to pursue the claims.
The judge was clearly very unimpressed with how the case had progressed, or failed to, over the years and said that it would be an unreliable vehicle for any principle or guidance around multi-claimant claims.
He considered all the facts and case law, and concluded it was right to dismiss the appeal. Given that:
- the CCA was relevant to every claim;
- CONC is relevant to all claims (at least after 2014);
- discretionary commission was relevant to every claim; and
- the failure to disclose the commission arrangement was relevant to every claim
it would be hard, he said, to say the claims do not involve common issues of law and fact – so these factors are relevant to the convenience test. He said it was not arguable that the High Court judge was wrong to exercise his discretion in the way he did on lead cases, nor that his views on case management directions were wrong. Although being more doubtful than the High Court judge on a number of points, the High Court judge had been entitled to make the case management directions that he did.
The FCA continues to encourage the use of its redress scheme, but the future of the scheme is still on hold, pending the separate challenge to it by some lenders.