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PLEVIN – and – PARAGON PERSONAL FINANCE LIMITED & ANR // Conlon v Black Horse Limited
Read the full Appeal Judgment on Bailli
1. These two appeals raise issues about the interpretation and application of section 140A of the Consumer Credit Act 1974 (“the Act”), in the context of the selling of single-premium Payment Protection Insurance (“PPI”) in connection with the lending of money under a credit agreement. They have been conjoined because they both raise questions as to the ambit and effect of the decision of this court (Lord Neuberger MR, Patten and Tomlinson LJJ) in Harrison v Black Horse Limited [2011] EWCA Civ 1128.
2. Section 140A (1) provides as follows:
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1. These two appeals raise issues about the interpretation and application of section 140A of the Consumer Credit Act 1974 (“the Act”), in the context of the selling of single-premium Payment Protection Insurance (“PPI”) in connection with the lending of money under a credit agreement. They have been conjoined because they both raise questions as to the ambit and effect of the decision of this court (Lord Neuberger MR, Patten and Tomlinson LJJ) in Harrison v Black Horse Limited [2011] EWCA Civ 1128.
2. Section 140A (1) provides as follows:
“The Court may make an order under section 140B in connection with a credit agreement if it determines that the relationship between the creditor and the debtor arising out of the agreement (or the agreement taken with any related agreement) is unfair to the debtor because of one or more of the following-
(a) Any of the terms of the agreement or of any related agreement;
(b) The way in which the creditor has exercised or enforced any of his rights under the agreement or any related agreements;
(c) Any other thing done (or not done) by, or on behalf of, the creditor (either before or after the making of the agreement or any related agreement.)”
Section 140B gives the court wide powers, in effect, to reopen the credit agreement or any related agreement, by ordering the creditor (or any associate or former associate of his) to make repayments, or to refrain from enforcing the agreement in whole or in part, or by requiring the terms of the agreement to be altered.- In the Harrison case, the question was whether the non-disclosure by the lender to the borrower of the existence and very large amount of commission which the lender received in connection with the simultaneous sale of PPI to the borrower was capable of rendering the relationship between them unfair. The sale of the PPI was regulated by the Insurance Conduct of Business Rules then in force (“ICOB”), made by the Financial Services Authority by way of implementation of the Insurance Mediation Directive in January 2005. After deliberation and consultation, it had been decided not to impose any such disclosure obligation. This court held that non-disclosure of the existence and amount of the commission could not therefore, on its own, give rise to an unfair relationship.
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