The Claimants issued unfair relationship claims under sections 140A–140C of the CCA in relation to motor finance agreements, alleging that the lender in question operated discretionary commission arrangements and failed to adequately disclose the commission and/or arrangements. Eight claim forms were used to bring claims against eight lenders on behalf of a total of over 5,000 claimants.
The issue at the heart of this litigation thus far has been the Claimants’ purported use of and the court’s interpretation of CPR7.3, which allows a single claim form to be used to start all claims which can be conveniently disposed of in the same proceedings. At first instance, HHJ Worster in the Birmingham County Court held that the convenience test under CPR 7.3 had not been met and the claims could not proceed by way of multi-claimant claim forms. He disaggregated the claims. The Claimants appealed and Ritchie J in the High Court held that the convenience test is broad and had been met. The lenders then appealed to the Court of Appeal. Permission to appeal was granted on a limited ground as to whether the High Court judge had properly exercised their discretion under CPR 7.3 and whether the case management directions were proper. Ultimately, the lenders’ appeal was dismissed.
The Court of Appeal’s decision
The Court emphasised that there is no rigid extra test beyond the wording of CPR 7.3 and held that the High Court Judge had exercised their discretion properly. Some of the key points made by the Court were:
- There were common issues at play including shared legal and factual questions and these would be relevant to considering convenience.
- Convenience extends to the whole proceedings not just the trial. The court’s full case management powers needed to be considered.
- Lead cases need not produce legally binding outcomes. The ability for lead cases to have persuasive value, narrow issues and encourage settlement can contribute towards convenience.
For these reasons the Court of Appeal concluded that the High Court Judge had exercised their discretion properly and there was no interference with that decision. The matter has been remitted to Birmingham County Court for further directions.
Possible implications
It is possible that there will be further attempts to bring motor finance and other thematic disputes using this process. That said, the Court has made it clear that the decision is narrow and unreliable for broad statements of principle or guidance concerning multi-claimant claims. Therefore, anyone wishing to make use of CPR 7.3 in future would need to meet the test of convenience. Notably the Court made it clear that unfair relationships remain fact-specific. The Court stated that there cannot be a generic common issue deciding “unfairness in principle” across all claims. It also stated that whether a relationship is unfair under s.140A CCA is inherently fact-sensitive and that there is no presumption that a large undisclosed commission by itself makes the relationship unfair. Cases of alleged unfairness therefore will still be tried according to their specific facts, irrespective of whether the CPR 7.3 is used to bring the claim.
The Appellant, Mr Berry bought a Volkswagen in June 2005 from a dealer for a cash price of £8,588.50. He paid a deposit of £500 and financed the rest on a 48-month hire purchase agreement with an interest rate of 8% and annual percentage rate of 16.5%. Mr Berry’s finance was settled in just over two years, and he subsequently sold the vehicle.
Mr Berry issued a claim in March 2023 under section 140A of the CCA alleging that the credit broker’s commission was not adequately disclosed and sought a declaration that the arrangement had created an unfair relationship under section 140A. A district judge dismissed his claim in February 2024, holding that a six-year limitation period applied and had expired because more than 6 years had passed from the end of the relationship before the claim was issued. The judge also found that the Claimant could not rely on s.32 of the Limitation Act 1980 (LA) because Black Horse had not deliberately concealed any relevant fact and in any event, Mr Berry could reasonably have discovered the commission payments earlier. Mr Berry appealed.
Court’s decision
The question for the judge was whether the LA prescribes any limitation period at all for claims under s.140A of the CCA. Mr Berry relied on THG v Zedra Trust Company (Jersey) [2026], in which the Supreme Court ruled that unfair-prejudice petitions under section 994 of the Companies Act 2006 do not engage a limitation period prescribed in the LA.
In cases involving unfair prejudice and unfair relationship, it has commonly been argued that the relevant limitation period is that set out in section 8 (action on a specialty) and, where a financial remedy is sought, section 9 of the LA.
The Court held that:
- Section 8 (12-year limitation period) did not apply as an “action on a specialty” in the context of statute-based claims, means obligations “created by” statute. It was held that s.140A does not create any obligations but provides a mechanism to obtain relief. As such a claim under s.140A was not an “action on a specialty”.
- Section 9 (6-year limitation period) did not apply because this section applies where an action is being brought to recover a sum due by virtue of an enactment. It was held that any sums that may be awarded under the unfair relationship regime are as a result of the court exercising its wide discretion, not because the sums are due under those provisions. As such, it was held that a s.140A claim for money is not a claim for a sum due by virtue of an enactment.
On that basis, the Court concluded that there is no statutory limitation period that applies to s.140A claims.
That said, the court stated that the equitable principle of laches (delay) may have the effect of barring old or stale claims. The law strives to prevent stale claims, and this decision acknowledges and endorses that. The court stated: “where the claimant has sat on their hands in circumstances where they knew or ought to have known they had been the victim of unfairness – cannot expect to benefit from the exercise of the court’s wide discretion.” The court also commented that this assessment will likely raise very similar issues to those that would be considered under s.32, albeit the assessment may be more holistic.
Possible implications
These findings may encourage Claims Management Companies to bring claims on behalf of claimants which relate to much older agreements. Lenders will still be at liberty to challenge such claims, but would need to do so as part of a wider, equity-based argument as opposed to by virtue of the LA. If older claims are able to proceed then this may bring about evidential issues (on both sides), but lenders could be considering now, how well equipped they would be to seek to defend such claims.
The Judge recognised the “potential ramifications” of this decision and the likelihood of a further appeal. Although the question of limitation for unfair relationship claims has recently been aired in Parliament, with the Government seeking to provide clarity that Zedra should not apply to section 140A limitation, the County Court’s findings in this case underline that the issue is far from settled. Limitation in this context remains a live legal question to be monitored.
