Jonathan Butters succeeds in Court of Appeal PPI mis-selling case

Jonathan Butters succeeded in the Court of Appeal on behalf of consumers who had been mis-sold a policy of payment protection insurance. The Claimants took out a loan to purchase some new windows and doors for their property.  The supplier of the goods misrepresented to them that taking out PPI was a condition of obtaining the loan and also failed to ensure that the policy was suitable contrary to the Insurance Conduct of Business Rules (‘ICOB’). The Claimants sued the creditor in respect of the loan pursuant to the unfair relationship provisions at s.140A-D of the Consumer Credit Act 1974.

At trial the judge held that the misrepresentation and breaches of ICOB of the supplier were committed as agent of the creditor by virtue of s.56 of the Act and that but for these the Claimants would not have purchased PPI. This rendered the relationship between the Claimants and the creditor unfair to the Claimants pursuant to s.140A. She ordered the creditor to repay the PPI policy and release the Claimants from further repayments in respect of it. The creditor appealed on numerous grounds.

In Scotland v British Credit Trust [2014] EWCA Civ 790 the Court of Appeal upheld the judge’s decision: (1) The representation related to the goods transaction and not simply the PPI transaction since the goods could not have been purchased without the loan and so s.56 applied. (2) The acts and omissions of a deemed agent of the creditor under s.56 could be taken into account in determining unfairness under s.140A(1)(c): The wording of s.140A(1)(c) was entirely apposite to include antecedent negotiations under s.56. (3) A breach of ICOB by the supplier could be taken into account even though the creditor did not owe such duties: ICOB set the standards by which the conduct of the supplier was judged.

Jonathan recently appeared in the Court of Appeal in another financial mis-selling case: Saville v Central Capital Limited [2014] EWCA Civ 337.

Jonathan Butters was instructed by Kevin Durkin and Adam Hizzett at Michael Lewin Solicitors, Leeds.

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