Application for a group litigation order against financial institution respondents refused by the Court

In a judgment handed down on 7 January 2025, the County Court in Birmingham dismissed an application for a group litigation order (GLO) made by thousands of individual clients of law firm, Harcus Parker. The applicants alleged unfair relationships existed between them and their lenders arising from the non-disclosure of commission arrangements in connection with the historic sale of payment protection insurance policies.

The application was novel and pursued a single GLO in respect of claims against eight respondent lenders. TLT acted for six out of the eight respondent financial institutions (the GLO Application).

Background

The background to the GLO Application centred on the Supreme Court’s decision in Plevin v Paragon Personal Finance Limited [2014] UKSC 61 and the finding in that case that the non-disclosure of commission retained by the creditor created an unfair relationship between the creditor and debtor  pursuant to s.140A of the Consumer Credit Act 1974. Since the Plevin decision, the courts have considered many thousands of claims in which unfair relationships have been alleged arising from commission disclosure issues (commonly known as Plevin claims). In this case, the applicants’ position was that large numbers of Plevin claims were capable of being progressed under the superstructure of a single GLO.

The position of the parties

The applicants contended that large numbers of Plevin claims ought to be entered onto a single group register and be managed by the Court collectively until resolution. The applicants advocated for the use of a number of test cases to resolve each of their proposed 18 GLO issues in a single 4-week trial. They argued that the results of the test cases would then provide a binding framework across the remaining cases within the GLO to enable the resolution of the non-test cases without the need for trials.

The applicants argued that Plevin claims were suitable for determination under a group litigation superstructure given that they shared common or related issues of fact or law and that each claimant relied on a defendant’s non-disclosure of commission as the principal factor giving rise to an unfair relationship.

The respondents did not accept that a GLO (or any alternative case management order pursuant to which Plevin claims were to be collectively case managed) was appropriate. The respondents’ position was that: (1) there were no common or related issues of fact or law between Plevin claims, such that a GLO was justified; and (2) in any event, the court should not exercise its discretion to grant a GLO. The respondents’ case was that unfair relationship claims are inherently fact sensitive and were not therefore amenable to collective resolution. The respondents relied on several recent decisions including Morris v Williams & Co[1], Angel and others v Black Horse and others and the  Court of Appeal decision in Self v Santander Cards UK Limited and Harrop v Skipton Building Society[2], where it was said:

“[the] application of sections 140A and 140B is bound to be fact-sensitive: even in a world of widespread mis-selling and unfairness, this is not a jurisdiction where, on its proper analysis and application, a single pre-determined criterion will always determine the question of unfairness; nor will one size of remedy fit all cases where the relationship is found to be unfair.”

It was common ground that in order for the GLO Application to succeed, the court had to be satisfied that the underlying claims gave rise to common or related issues of fact or law. In addition to this jurisdictional threshold, the court retained a general discretion as to whether to grant a GLO.

Decision

The court refused to grant the GLO. HHJ Kelly’s judgment of 7 January 2025 concluded that:

• The majority of the GLO issues proposed by the applicants (including the key issues relating to the existence of unfairness in debtor-creditor relationships and the appropriate remedies for Plevin claims) did not meet the jurisdictional threshold required for a GLO. The Court was of the view that the applicants’ “approach as to alleged common or related issues of law or fact [was] far too generalised and often stray[ed] into the forbidden territory of identifying issues they would like to have determined as opposed to issues that are likely to actually arise.”

• It was not in any event appropriate for the Court to exercise its discretion to grant a GLO as (1) a GLO would not save expense; (2) the trial of test cases would not yield binding decisions; (3) the applicants' argument that a GLO was required to ensure access to justice was “unpersuasive”; (4) a GLO would lead to delays in the resolution of Plevin claims; and (5) a GLO risked allocating a disproportionate share of the court’s resources to Plevin claims to the detriment of other claims.

• The applicants’ secondary application for an alternative form of collective case management order was also to be dismissed – this suffered “from all the same issues that render[ed] a GLO inappropriate”.

• Large numbers of claims had been issued under cover of a single claim form. Whilst this was not impermissible in principle, the convenience test in CPR 7.3 had to be met. The court concluded that the applicants’ Plevin claims could not be conveniently disposed of in the same proceedings, such that the claims should be disaggregated.

The applicants’ solicitors had conducted very little analysis as to the detail of the claims of the 3,420 claimants listed on the claim form that had been issued. The court was alive to this and commented that “it is not appropriate for a GLO, nor indeed an omnibus claim form, to be used as a metaphorical ‘dumping’ of claims at the doors of the court and of defendants. Claimant solicitors should evaluate the merits of individual claims and likely issues arising before issuing claims rather than putting the onus on defendants to construct the claim for them.” Those engaging with large scale claimant litigation are still required to comply with the usual requirements of the pre-action protocols.

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[1] [2024] EWCA Civ 376

[2] [2024] EWCA Civ 1106