| 
Important Appeal On ‘Omnibus’ Motor Finance Claims
March 2025 saw the decision of the High Court in Angel v Black Horse Ltd [2025] EWHC 490 (KC) (Mr Justice Ritchie).
In recent times, there has been a noticeable increase in multi-party litigation, especially concerning consumer-related claims. Many of these cases have concerned flexible (and often difficult to predict) claims brought under the likes of the unfair relationship provisions of the Consumer Credit Act 1974 (“CCA 1974”), and various consumer focused legislative provisions.
Where multiple claimants are involved, each of whom has similar – though not identical – claims, the Civil Procedure Rules (“CPR”) offer various options as to how such claims may best be litigated, including:
- Bringing multiple claims within a single claim form under CPR 7.3.
- By way of representative actions under CPR 19.8.
- Pursuant to group litigation orders made under CPR 19.21.
- Or by simply issuing separate claims for each of the individual claimants (plainly the most expensive option).
Angel concerned the first of these options, namely whether and when multiple claimants can use a single claim form to pursue their respective motor finance commission claims. The main reason for choosing such a course is obvious – if separate claims were issued, each claimant would have to pay their own issue fee the amount of which is referable to the nature of their claim and (in most cases) the size of the monetary award which is sought.
CPR 7.3 provides that “a claimant may use a single claim form to start all claims which can be conveniently disposed of in the same proceedings.” In practice, it is common for multiple claimants to use one claim form to pursue various causes of action, even though some claims may not be common to the various claimants and the factual underpinnings of the various claims may differ. Whilst CPR 7.3 refers to a claimant (in the singular), when this is read together with CPR 19.1, it is clear that multiple claimants can bring their various, individual, claims by way of the same claim form. This is because CPR 19.1 states in simple terms that “any number of claimants […] may be joined as parties to a claim”.
In Angel, eight claims were issued against eight finance houses involving more than 5,800 claimants in all. These were claims brought under the unfair relationship provisions in ss.140A-140B of the CCA 1974. All were premised upon the existence of allegedly undisclosed secret commissions paid in relation to motor finance agreements. Unfair relationship claims are notoriously fact specific and require an examination of the entire relationship between the parties, starting with the initial negotiations, leading on to the terms which were in fact agreed, and finally looking at the timing and manner of enforcement pursued by the creditor. In Close Brothers Limited and others v Hopcraft and others [2024] EWCA Civ 1282, the Court of Appeal held that a relationship will not necessarily be unfair for the purposes of the CCA 1974 where a secret commission is paid by a lender to a broker.
In the County Court, His Honour Judge Worster held that the claims could not be conveniently disposed of together within the meaning of CPR 7.3. His decision chimed with that of Master Davison in Abbott and 3,499 others v Ministry of Defence [2022] EWHC 1807 (QB). That case involved claims relating to deafness caused by the claimants’ service in the military. The Master held that 3,500 claims “plainly cannot be conveniently disposed of in the same proceedings”, going as far as to hold that “the contrary is not seriously arguable”. The Master pointed to the disparate nature of the claims both in terms of timeframes and the factual circumstances giving rise to them.
Mr Justice Nicklin reached a similar conclusion in relation to multiple defendants in Thurrock Council v Stokes and others [2022] EWHC 1998. Having heard a trial of the Council’s claims against 107 named defendants relating to encampments within its administrative area, the judge commented that hearing a trial against so many defendants, each of which concerned different factual allegations, was the “antithesis of ‘convenient’”.
However, before HHJ Worster had handed down his judgment in Angel, the Divisional Court had heard an appeal in the Abbott case. It held that CPR 7.3 requires consideration of various factors, including:
- A fact specific enquiry as to whether claims can conveniently be disposed of in one set of proceedings, ‘disposed of’ meaning ‘finally determined’ for these purposes.
- It held that ‘convenience’ means simply usefulness or helpfulness. So, what is required by CPR 7.3 is that it would be both possible and useful or helpful to have the claims finally determined in the same, rather than in separate, proceedings.
- CPR 7.3 does not require it to be practicable to determine all of the claims brought at one trial.
- The burden of demonstrating convenience rests with the claimants.
- The simple fact that the claims could be case managed together does not, in itself, establish that their common disposal is convenient. Instead, the question is whether the various claims have sufficient commonality of significant issues of fact that would make it useful or helpful, in the interests of justice, for all claims to be disposed of together, for example because findings of fact made in relation to one or more of the claimants would be capable of binding the remainder of the claimants.
- As such, normally the most important factor is the degree of commonality between the causes of action asserted by the various claimants.
- The fact that the court would only earn one issue fee instead of thousands is not a relevant consideration.
The decision in Abbott was handed down in sufficient time for HHJ Worster to take account of it before finalising his judgment. However, he nevertheless concluded that there were not common issues of sufficient significance to warrant the collective determination of the claims which had been brought.
On appeal, Mr Justice Ritchie disagreed. He permitted the use of a single claim form against each finance company. He did, however, reach this conclusion even though defences had yet to be pleaded on behalf of the finance houses. He also commented that, when applying CPR 7.3 to unfair relationship claims, lead cases would normally have to be tried on all of their facts, rather than the court reaching decisions in principle in respect of particular issues, due to the fact specific nature of the analysis to be undertaken.
Comment
In principle, this decision opens the door to ‘omnibus’ claims being pursued in respect of secret commission claims against finance houses, where one claim could engage hundreds or even thousands of claimants. The courts have previously tended to be reluctant to agree such an approach where allegations of unfair relationships are made under the CCA 1974, given the highly fact specific (and, often, impressionistic) enquiry the court must undertake. Depending on the upcoming decision of the Supreme Court in the Close Brothers litigation, the decision in Angel may nevertheless pave the way for large-scale, though individually low value, secret commission claims to be launched against financiers.