On 9 December 2022 HM Treasury published a consultation paper on reform of the Consumer Credit Act 1974 (“CCA”).
The Government announced its intention to reform the CCA in June 2022, with the ambition of moving most of the CCA from statute to FCA rules. Given the scale and complexity of this work, it is expected to take a number of years. The consultation paper is the first step in this process. In it, HM Treasury seeks views on the objectives, principles and overall direction of the proposed reform.
As long ago as 2001 in the landmark case of Royal Bank of Scotland Plc v Etridge [2001] UKHL 44 the House of Lords (since renamed the UK Supreme Court) significantly extended the circumstances in which a financier will be put on constructive notice of misrepresentation or undue influence committed against an individual executing a Guarantee or other security, but there remains a great deal of misunderstanding of the relevant principles.
The Government has announced that it is committed to a long-term wholesale reform of the Consumer Credit regime.
Whilst welcoming this announcement, it is rather difficult to see how there was any alternative.
Much of the legislation and regulatory framework around Consumer Credit in the UK has intimate links with the European Consumer Credit regime, which goes some way to explaining the inordinate complexity of the current framework, which is comprised of numerous layers of primary and secondary legislation, including the Consumer Credit Act 1974 (“CCA”), detailed Regulations made under it and the FCA Handbook.
Disclosure of Brokers’ Commissions remains very much a live issue within the asset finance industry, and in our last Briefing we suggested some practical steps in Dealing with Broker Commission Refund Claims – Click Here
Since then we have been involved in a number of instructions which has caused us to undertake a thorough review of the case law both in terms of the Wood and Pengully decisions and various other cases, which has given us some encouragement in the approach to be adopted to at least some of these claims.
We recently succeeded in full in a claim for damages for conversion on behalf of a financier which raised the apparently novel point of whether a large Excavator fell within the definition of “motor vehicle”.
In De Lage Landen Leasing Limited t/a Hyundai Construction Equipment Europe Finance v Dring (Manchester Circuit Commercial Court 13 July 2022) both parties were the victim of a fraudulent disposition of the Claimant’s Excavator by the Hirer and/or an associated company.
Financiers have been, together with almost all other litigants, subject to what seems to be an ever-increasing spiral of expense in navigating the various fees and charges payable under the court system, a trend which is been in place now for almost 2 decades.
We thought it is worth highlighting two points which can bring some relief to this situation.
As we are moving towards the second anniversary of the pandemic it is worth pausing to reflect that, after some initial reluctance, technology has been quite successfully embraced both by lawyers and also by the courts to keep the system running.
Obviously meetings between lawyers and clients have largely been replaced by virtual contact through Microsoft Teams and Zoom, but virtual contact has now taken a firm foothold in relation to the litigation process.
Readers may recall our lengthy article on the somewhat contentious schools leasing issue in a recent Briefing following the High Court judgment in the Schools Facilities Management case which can be found here.
In our last Briefing we reported on the Court of Appeal decision on broker commissions in Wood v Commercial First Business Ltd and the rather surprising decision of the NACFB in recommending that “both regulated and unregulated firms, working in all sectors, should be transparent about their commissions and fully disclose the amount of commission received”.
With the industry still reeling from revelations emerging from the demise of a certain Lessee, and taking into account the sensitivities of referring to any of the specific current or forthcoming matters in which we are instructed, we thought it might be worthwhile making some general remarks on steps which Funders may wish to consider to prevent being the victims of serious fraud going forward.
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