Case No. 2IR67308
Neutral Citation Number: [2012] EWHC B13 (Mercantile)
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
MANCHESTER DISTRICT REGSITRY 
MERCANTILE COURT 

Civil Justice Centre
1 Bridge Street West
Manchester
M60 9DJ

Date: Wednesday, 4th July 2012

Before:
HIS HONOUR JUDGE WAKSMAN QC
Sitting as a Judge of the High Court
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Between:

	DYLAN ANDREW 
IAN DRAPER 
LEE GATLEY 
JAMES SHIER	

Claimants	
	and		
	BARCLAYS BANK PLC	Defendant	
	
And
		
	STEVEN CARROLL	Claimant	
	and		
	EGG BANKING PLC	Defendant	
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Daniel Tividar (instructed by ULL Solcitors) for the 1st and 5th Claimants:
Adam Walker (instructed by Wixted & Co., Solcitors) for the 2nd, 3rd and 4th Claimants
John Taylor (instructed by Simmons & Simmons LLP, Solicitors) for all Defendants
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JUDGMENT

HHJ WAKSMAN QC:   
INTRODUCTION
1.	I have before me applications to stay five different claims alleging in various ways the mis-selling of payment protection insurance (“PPI”).  Four of those claims, being those made by Mr Andrew, Mr Draper, Mr Gatley and Mr Shier, have been brought against Barclays Bank, which has been the recipient of a very large number of such claims. The fifth is brought by Mr Carroll against Egg Banking Plc whose assets and business are now owned by Barclays.  I refer hereafter to both banks together as “the Bank”.  The Bank is represented before me today by Mr Taylor.  The claimants may be conveniently split up into two groups.  The first group consists of Mr Andrew, as against Barclays, and Mr Carroll as against Egg (“the Andrew claimants”. They have been represented by the solicitors, Ultimate Law Limited (“Ultimate Law”) and appear before me today through counsel, Mr Tividar. The second group of claimants consists of Mr Draper, Mr Gatley and Mr Shier in their claims against Barclays Bank.  They are represented by Wixted & Co, Solicitors and appear before me through Mr Walker of counsel. All those legal representatives have extensive knowledge of and experience in the bringing of such claims.  I should say at the outset that I am deeply indebted to all counsel for their excellent and succinct, submissions on the various matters canvassed before me.  
2.	There is only one application formally before me, which has been brought by the Bank, and that is to stay all of these claims for 8 weeks so that they can be processed as complaints in accordance with the rules laid down by the FSA in its handbook under the provisions known as DISP Appendix 3, which deal with the handling of PPI complaints.  I shall refer to that FSA process as “the Scheme” and to the stay sought as “a Scheme Stay”. 
3.	The second group complainants, to which I shall refer as “the Gatley claimants”, consent to an 8 week stay as sought, although there had been some argument as to the form of order.  However, Mr Walker does not suggest that the order as framed by the Bank is itself objectionable and accepts, as does Mr Taylor, that it does not fetter the ability of the parties to suggest, or indeed engage in, any form of ADR.  However, for reasons which I will enunciate later, he says that this matter could have been dealt with before today, which has an impact on costs.
4.	The second application before me, although not formally set out in an application notice, is for a different kind of stay which is any event to stay these proceedings pending the decision of the Supreme Court, expected in around the Spring of next year, in the well-known PPI case of Harrison v Black Horse Ltd [2010] EWHC 3152 QB.  I shall refer to that kind of stay as “a Harrison Stay”.  It has arisen relatively recently in the cases before me for this simple reason.  In another PPI case, namely Barnes v Black Horse Ltd, an application was made by Black Horse on 14th June 2012, so a little over two weeks ago, to stay that claim on the basis that it should await the decision of the Supreme Court. I upheld that submission and stayed the claim and I gave a fairly detailed extempore judgment, which has not yet been published, because I am in the course of completing the corrections to it.  That said, there is a more than adequate summary of my oral judgment contained in divider 3 of the authorities bundle before me.  [See now Barnes v Black Horse Ltd [2012] EWHC 1950 (QB)]. 
5.	The state of play in relation to the application from the Harrison Stay is as follows.  The Andrew claimants indicated yesterday and confirmed today that they are agreeable to a Harrison Stay of their claims.  However, had the application only been for a stay in order to process a complaint under the Scheme, they would have maintained the objection that they have already enunciated in a witness statement from Miss Richards, a solicitor at Ultimate Law, contending that a stay on that basis would not have been appropriate.  That objection in one sense is now academic because there is going to be a stay for a longer period in any event, but the issue remains a live one because the Andrew claimants contend that, although they have consented to a stay, it does not follow at all that they should be liable for the Bank’s costs of the application.  They submit they should have their costs of the application or at least there should be no order for costs because if the original application sought had been the only one and had been fought out, the Bank would have lost. For that reason, the substance of that application remains for me to be determined albeit it will now go simply to the question of costs.  
6.	So far as the Gatley claims are concerned, the position is reversed. They have consented to a claim on the original basis but would not consent to any wider claim on the Harrison basis.  The question of a stay on the Harrison basis remains live before me because the Bank contend that if the Scheme Stay on the more limited basis is not productive, I should direct here and now that the stay should continue but on the Harrison basis. Therefore I have to deal with that issue as well because that aspect of the Bank’s application is resisted by the Gatley claimants.  
BACKGROUND
7.	Before dealing with the specific cases, it is necessary to say something by way of background about PPI litigation in general and the Scheme in particular.  Where appropriate, I draw upon the evidence contained in the witness statements of Mr Stephen Prestney  made on 18th May and 3rd July and I have also considered, and in some respects deal with contentions made in, the witness statement of Miss Lipszyc, dated 27th June 2012.  
8.	By early 2010, there were many hundreds of PPI cases, if not more, proceeding principally in county courts across the country. A large number of those were being brought in the North West.  As a result of that, a decision was taken to attempt to inject some order into that litigation firstly by case managing a number of those claims as a group and, in January and March 2010, I held case management conferences involving over 40 such claims.  I took the opportunity to give some guidance, in general terms, as to how such cases might be managed thereafter and that has proved to be of interest, and of some use to district judges and county court judges in various locations.  I also selected a number of cases for trial in order to have some rulings on some of the issues that were raised, although ultimately, one way or another, none of those trials took place.  At the time, I was also conscious of the fact that the FSA was in the process of drafting revised rules for financial institutions as to how they should handle PPI complaints made against them.  It seemed to me that any procedure for handling complaints was directly relevant to how any litigation should be case-managed and so I asked for information as to when they would be finalised and what the financial institutions’ view about them would then be in relation to any cases.  
9.	Some time passed but, on 10th August 2010, the Scheme, as I have referred to it, was introduced by the FSA which sets out a regime for how complaints about alleged PPI mis-selling should be dealt with and decided.  The introduction of those rules was the subject of a claim by way of judicial review brought by the British Bankers Association.  On 20th April 2011, Mr Justice Ouseley rejected that claim and on 9th May 2011 the British Bankers Association announced that it would not be appealing that decision.  It meant that thereafter there was no impediment to the scheme going live, as indeed it did.  On 13th June, the Bank announced that they would deal with all PPI complaints, and indeed settle them, in so far as they had already been put on hold as at 20th April, which involved, I am told, many tens of thousands of complaints.
10.	The Bank is now in the process of taking the initiative by writing to in excess of 500,000 of its customers, of whom it is aware PPI was issued, inviting them to submit their purchase of PPI for review and in order to process PPI complaints generally the Bank has employed an additional 2,000 complaints handlers dedicated solely to this matter.  Because there has been a large complaints team, it has enabled the Bank to meet timetables agreed with the FSA for processing the complaints.  Since 1st October the bank has processed PPI complaints under the Scheme within the eight-week resolution period laid down by the FSA.  I should add that is complaints that have been made as complaints.  In that regard, there has been produced by the Office of the Financial Ombudsman Service an eight-page complaint form which is to be used under the Scheme.  It is written in ordinary layman’s language and is designed to be easy to complete.  It is reproduced at divider 1 of the application bundle under section A, pages 10 to 17.  The person who wishes to complain is requested to fill out the form and then send it to the appropriate financial institution.  If the complaint is rejected, there is a further avenue of regress, which in fact existed previously, which is to bring the matter before the FOS.  It is understandable why institutions such as the Bank wish to use a standardised complaints form, because that will enable the matter to be processed in a consistent and recognisable way by the teams that are employed to deal with it.  The notion therefore that a complaint should be made by a particular form can hardly be regarded as objectionable, and indeed that submission is not made before me.
11.	As to what has happened to complaints thus far, the evidence of Mr Prestney  discloses that average figures over a three-month period earlier this year shows that over 50 percent of PPI complaints made to the Bank have been upheld.  In his second witness statement, he updates this and says that the most recent information shows that for the period 5th May to 23rd June 2012 over 66 percent of complaints to the Bank were upheld , allowing for complaints where no PPI was ever purchased by the customer in question, which, unsurprisingly, would be rejected at the first hurdle.  It is worth noting at this point that, apart from the rejection at such a threshold level in such an obvious case where there is no PPI, there otherwise are no eligibility requirements, for example, that the policy must have been taken out only five or ten or 15 years ago.  The question of the age of the policy may be relevant to the quality of evidence submitted about it and it may be relevant to a limitation issue but those are matters that will be dealt with by the Bank as part of its substantive consideration of the complaint and not as a reason to reject it from consideration in the first place.  Broadly then, the effect of that is that on the basis that there was indeed a PPI policy purchased from the financial institution in question, that financial institution will accept the complaint in the standard form for resolution one way or the other within the updated eight-week period.
12.	On this particular point, Miss Lipszyc suggested in her witness statement that a success rate of 60 percent impliedly entails a success rate of substantially less than 100 percent and that was somehow inadequate given the merits of the complaint, but that criticism seems to me to be misplaced. The existence of a complaint does not mean that it was well founded. The point is not that a party using the Scheme is bound to win but rather that it is a suitable, fair and cost-effective form of ADR where every complaint will be properly considered. There is no evidence that that is not so here. Indeed, Mr Prestney  points to a number of advantages to bringing a claim within the Scheme rather than litigating it in court. For example, the time taken to process the complaint is significantly speedier than that which would be taken by the court. I have already referred to the mandatory eight-week period and I should add that Mr Prestney  in his second witness statement, based again on information from 5th May to 23rd June, shows that, on average, the Bank acknowledges a complaint within 4.9 days and in 95 percent of complaints responded to in the final week of that sample week, it had given its decision within 41 days, notwithstanding that the time limit is a maximum of 56 days. That is on the basis that a complaint has been made on the complaint form.  As I will note later on, the same does not follow or necessarily follow, at least historically, where the complaint has been put in the form, for example, of a letter before action.  In a number of those cases, the complaint at least has not overtly been expressed as a complaint to be dealt with under the Scheme.  
13.	Another advantage that is put forward is costs saving. The Scheme is free for use by customers making a complaint and all they need to do is to fill out the form. Court proceedings on the other hand generate significant amount of costs. The average figures given by Mr Prestney were claimant’s costs of £10,800 per claim, subject to success fees, and costs for the bank of over £6,000 per claim. Those figures seem to me, from my experience, to be more than realistic. Indeed, in relation to the cases before me, the Gatley claimants have furnished costs information showing that the cost to date, shortly after issue of proceedings, is £5,000 per claim, with estimated costs to trial of £20,000 per case.  That is the Bank’s costs estimates and the trial cost of £20,000 per case is also a figure which has been given by the Gatley claimants. Somewhat more modest costs are said to apply in relation to the Andrew claimants. In the case of Andrew, they are just over £4,000 to date and another £3,685 to trial, but that is of course excluding the 100 percent uplift which will be sought in the event of success.  As against that, the claims themselves may be for amounts as modest as £2,000 and are generally limited to the amount of money spent on the premiums for the PPI and any interest paid on any credit given for that purchase.  
14.	Mr Prestney then says that the average payout made by way of compromise to a successful claimant in court proceedings, is £6,000, so that even on that somewhat larger figure, costs are in excess of compensation recovered. Mr Walker says that sometimes litigation costs what it costs. I take that point but it does not render irrelevant the fact that there may be an option available elsewhere which is very much cheaper.
15.	So far as the rules for the Scheme itself, there are said to be some further advantages.  For example, paragraph 3.6.2 provides ten situations in which it is presumed that the customer would not have purchased PPI in certain cases.  In other words, the claimant has bought a product which it would not otherwise have had and would not have needed, and this would include the case where the bank did not disclose that the PPI was optional. Thus relief is given on a simple question of non-disclosure whereas in court proceedings (and I am familiar with issues of this kind), the burden would be on the claimant to show that a positive misrepresentation had been made that the PPI was in fact compulsory.  Another example is the presumption that PPI would not have been purchased if the total cost of the PPI was not disclosed. Again, in court proceedings the allegation would usually require a positive misrepresentation. Mr Prestney says that the bank does indeed apply properly those presumptions except where there is evidence to displace them.  
16.	So far as the amounts paid out by way of damages, Mr Prestney goes on to say, having taken a sample of cases, that in respect of the 56 out of 128 court claims issued by Ultimate Law against Barclays which have settled, the average damages payment was approximately 83.3 percent of the amount that the customer would have been awarded had they brought their claim as a complaint within the Scheme.  Indeed, Mr Prestney says that that understates the position because, as part of the full redress under the Scheme, interest would be paid to the customers which had been paid by them to fund the purchase and in many cases the statutory eight percent interest on top of the compensation figure would be paid as well.
17.	Mr Prestney makes the point that in relation to these claims, if stayed for an eight-week period, such claims would indeed recover the statutory interest at a rate of eight percent should their claims succeed, so there is no prejudice in that sense by delaying the claim by a further eight weeks.  All of that said, of course, it is not necessary for the applicant for a stay on the grounds of ADR to show the particular process is more legally advantageous than litigation, although that seems to be the case here. The simple point is that there is available a real alternative to litigation which the parties should explore first.  
18.	Court resources are also to be taken into account.  Obviously the scheme does not use any court resources whereas in the claims which are litigated court resources are most certainly used, and very considerably so. That involves the court staff dealing with paperwork re statements of case, the listing of hearings and, of course, the use of court time by judges and district judges who hear CMCs and make directions.  There can be interim applications as well.  Frequently applications are made either to strike out or to seek further information.  In addition, not all of the claims are heard on the small claims track.  A number go into fast track and some even go into the multi-track.  
DISCUSSION
The case for Guidance 
19.	In what I say below I am obviously concerned essentially with the immediate applications before me and the issues arising therein.  But given that the Scheme has not, as far as I know, been discussed in any detail in any High Court judgment (save the BBA case) as to how it actually operates and is intended to operate, and given that applications to stay may arise in other cases, it may be useful if I offer some general observations or guidance on these matters as well.  Mr Tividar on behalf of the Andrew claimants urges me not to do so on the basis that it is inappropriate or, at least, that there are other parties who should be consulted or who should appear.  I reject that submission.  First of all, any observations that I make are necessarily general and particular facts may arise in individual cases which will suggest a different result.  Secondly, strictly, any wider observations on my part will be regarded as obiter in any event. It is obviously to be hoped that they will prove to be of interest and some use to other courts.  That is the strict position.  
20.	Thirdly, in litigation which is of a large scale such as this, involving hundreds, if not thousands, of cases proceeding around the country, it would in my view be an abdication of my wider duty to promote the overriding objective not to attempt at least some form of general guidance, just as I gave in March 2010, with the genuine aim of saving other parties hereafter time and costs and encouraging a real engagement with ADR. Mr Walker has also made some general points in relation to whether I should make such general observations and the desirability generally of ordering a stay, although he consented to it on behalf of his clients in this case.  I will deal with his points hereafter.
21.	Mr Tividar has made it plain that the sort of parties that he said in paragraph 31 of his skeleton argument might be expected to attend but who are not here, for example the OFT, firms of solicitors, the FOS, other banks, lending institutions, insurance intermediaries and consumers, he puts forward not in any adversarial way, but neutrally so that the court can consider whether that is an important factor. I do not believe that it is. I have had the considerable assistance that I have come to expect from counsel who appear before me today and their solicitors, who all have great experience in these matters and I can claim at least to have had some exposure to litigation in this area as well.  Given the technical confines of any generalisation I make, the fact that there are not other parties present does not appear to me to be an impediment. It obviously goes without saying that the particular context for my making any general observations is first of all the Scheme and the procedure which the Bank, ie Barclays, says that it undertakes.  If there are banks that operate in different ways then different considerations might – and I say might – arise.
The Overriding Objective 
22.	My starting point, of course, is the adherence to the overriding objective.  That requires the court to deal with matters justly, in particular expeditiously and proportionately to the amount at stake, fairly, and allotting an appropriate share of the court’s resources.  I place particular emphasis on the need for proportionality in the light of the reforms to CPR to be implemented in April next year as consequence of the Jackson Review on Costs which was centred upon the need to manage costs and manage cases proportionately, but even under the present regime there is considerable emphasis given in the CPR for the desirability of making proper use of ADR.  At the pre-action stage in paragraph 6.1 of the practice direction on pre-action costs, it is provided that: 
“Before starting proceedings, the parties shall make appropriate attempts to resolve the matter without starting proceedings and in particular consider the use of an appropriate form of ADR in order to do so.”  
23.	The commentary at C1A-007 of volume 1 of the White Book complements this by stating under “Considering alternatives to litigation”: 
“…parties and their advisers need to consider whether any of the following might be appropriate…. making a formal complaint to the organisation in question or at the next stage, a complaint to the Ombudsman.”  
At the post-issue stage, CPR 1.4(2)(e) states that: 
“In furtherance of the overriding objective the court should actively manage cases by encouraging the parties to use an alternative dispute resolution procedure if the court thinks that appropriate and facilitating the use of such procedure.”  
  
Costs Sanctions and the case for a Stay 
24.	 I have also been referred to the well-known Court of Appeal decision in the case of Halsey v Milton Keynes NHS Trust [2004] 1 WLR 3002. Although differing views have been expressed following that decision, what it establishes is that the court cannot compel parties to undergo an alternative dispute resolution but nonetheless the court can and will in appropriate cases impose costs sanctions by those who do not take advantage of such procedures.  In that regard, the Court of Appeal made it plain that in terms of case management it was in favour of the “robust encouragement” of ADR. The nature of PPI claims, namely allegations of misrepresentation, breach of ICOB rules, unfair relationship, negligent advice, some points of law, and very often disputed questions of fact, make this kind of claim a most suitable candidate for ADR.

25.	In the Halsey case itself, the Court of Appeal identified six factors as being relevant when a court considers whether there should be a costs sanction against a claimant usually be depriving him of one or all of his costs, even those successful at the end of the day, because there was an unreasonable refusal to participate in alternative dispute resolution.  Looking at those factors and applying them to PPI cases and the Scheme, the first factor is the nature of the dispute. As already indicated, that seems to me to be of a kind which is eminently capable of being dealt with by ADR and indeed, if it were not, then the Scheme as a whole would not have been set up in the first place.  Secondly, so far as merits are concerned, I also accept that it is not possible reasonably to describe every or the average PPI claim as necessarily watertight or so bound to succeed that there was no point or reason why any claimant should consider settling it and getting less than the full amount indicated.  Legal and factual disputes abound in such cases.  
26.	Thirdly, other settlement methods attempted: in practice it is not usual for other forms of ADR to be regularly used in such cases.  Of course, if they are and they have been, different considerations might arise but, given the amounts involved, one can understand why, for example, parties might be unwilling to pay out for the cost of a mediator even though in large scale commercial litigation that might prove to be economical.  The advantages of a scheme which is free for the claimant are obvious.  That is reflected in the fourth factor which is costs because it does not cost the claimant anything.  So far as delay is concerned, the Scheme requires the complaint to be dealt with in eight weeks and it is not something which can only be invoked in the days before trial so the Scheme cannot be challenged as not worthy of use on the grounds of delay.  
27.	Finally, the question of the prospects of settlement: as I have indicated, it is significantly over 50 percent; it is clearly a worthwhile course at least to be attempted.  Looking at the matter generally therefore and applying Halsey principles, it seems to me that in general, although the facts of each particular case will of course be relevant, a person with a PPI claim who hereafter fails to engage with the Scheme but instead proceeds straight to litigation must at least be at a real risk of an adverse costs order even if successful in the claim at the end of the day.  I have set out why the six factors laid down in Halsey would impel that result.  
28.	The fact that the Scheme is one which the FSA requires the Bank to undertake where a complaint is made, as opposed to, for example, mediation which, at the end of the day, can only apply if both parties agree to it, does not seem to me to take PPI cases in the Scheme outside the ambit of the principles laid down in Halsey.  Miss Lipszyc suggests that to order a stay in circumstances like this is somehow a fetter on a claimant’s access to justice.  That does not seem to me to be correct.  The CPR makes perfectly clear that claimants do not have the unfettered right to litigate any claim without regard to the principles which I have outlined above and in particular the overriding objective and the desirability of ADR.  The availability of a stay for ADR, which the courts frequently order, is a recognition of that.  It is why, for example, in case management information sheets used in the Mercantile Court, there is a specific question relating to whether ADR has been considered with a party and indeed with the other side and why the standard form of allocation questionnaire says this: 
“Parties should make every effort to settle their case before the hearing.  This could be by discussion or negotiation or by more formal processes such as mediation.  The court will want to know what steps have been taken in settling the case early to save costs including court hearing fees.”  
And then: 
“The legal representatives have to declare that they have explained to their client the need to settle if the option is available or if they have not.”
29.	A modest suspension of proceedings ordered by the court so as to facilitate ADR is neither disrespectful to the court process nor a denial of access to justice.  At this point, I will deal with some of the submissions helpfully set out in the skeleton argument prepared by Wixted & Co.  The first observation is that the court’s power to stay proceedings, which derives from CPR 3.1(2)(f), should be exercised in accordance with the overriding objective.  I agree.  Secondly, it is said that, “After a complaint is considered, some complaints will not be upheld.  If a complaint is not upheld further delay with result.”  That is a statement of the obvious.  It applies to any form of ADR.  If the ADR fails, it could be said hereafter that that time has been wasted but if ADR is proper to engage with in the first place, that does not seem to be a valid point.  Moreover, here, the period sought is only eight weeks.  Courts frequently order a stay for more general forms of ADR of up to three months.  
30.	Thirdly, there is said to be the question of how any delay for ADR can impact upon the evidence to be furnished at trial if that is what happens.  The greater the delay, it is said, the greater the deterioration of the quality of oral evidence. Obviously in general terms that could be the case but a degree of reality needs to be borne in mind here. Many of the claims here relate to what is said very many years ago. They are already of some considerable antiquity.  I take the view that it is a fair point to say that against that background a delay of eight weeks is not likely to make any difference and, indeed, of course, if a complaint is made under the Scheme, the relevant claimant will already have been required to think back as to what happened and what was said, what was done, in order to explain why he or she has a complaint in the first place. It will have been produced in written form. So I do not accept that further delay is likely to cause any prejudice.  That deals with the further point that the delay is going to affect the quality of the evidence to be advanced.  
31.	A fair point is then made about limitation.  Cases involving limitation issues may have to be dealt with differently.  Mr Taylor did not resist the notion that if there was a limitation issue looming, any sensible claimant may have to issue proceedings in order to stop time running because even if a complaint is lodged, if it is rejected and the claimant feels it has been wrongly rejected, litigation may thereafter become necessary. Of course, even in those circumstances, the banks may be able to assist the claimant and save yet further costs by making a standstill agreement with the claimant so that no limitation point would be taken for the period during which the complaint is being analysed should litigation thereafter follow. The existence of that special situation is not an argument against the general desirability of proceeding to a complaint before any litigation. 
32.	It is then submitted that where a particular claimant is not happy to submit to a stay, one should not be imposed.  That in my judgment is wholly misconceived.  The court has the power to impose a stay as set out in CPR 26.4(2)(b), either where all parties request that stay or because the court of its own initiative considers that such a stay would be appropriate.  So the fact that one claimant is not happy does not in any way deprive the court of jurisdiction.  That of course is not to say that the court can force the parties to settle or that it can force a mediation but the purpose of these orders is not to force the ADR to produce a particular result, it is simply to suspend the proceedings for a period of time to give that process a chance to succeed.
33.	A further submission says that the appropriateness of a stay should be decided on a case by case basis.  Fundamentally, at the end of the day that is true.  Every application for a stay hereafter will have to be sensitive to the facts of the case.  That is no reason for my not attempting some more general guidance for the reasons I have given.  
34.	Another point is made that in relation to the Gatley claimants, there had been a lengthy letter already written which the Bank could have taken the opportunity to treat as a complaint, even if not expressly referred to as such (although I think the complaints procedure is referred to in those letters) and as eight weeks have passed since those particular letters, that counts against a stay.  I see that argument which may be relevant as to costs but obviously the observations I make principally concern how matters ought to be dealt with in the future and in that regard it is worth noting what Mr Taylor has accepted before me: this is that even if in the past the Bank had regarded the letter before action as precisely that, namely a letter which is strictly confined to the imminent invocation of the legal process and nothing else, so that the Bank took the view it was not necessary to consider it as a complaint, that will not be the view of the Bank hereafter. In other words, if a claim arrives at the door of the Bank whether it is already in the standard form or whether it is in some other form threatening litigation or not, the response of the Bank will be to treat it as a complaint and to that end will need to ask that the standard form is completed.
35.	That really deals with point (I) in the submissions.  Point (J) deals with the history of the Gatley claimants’ complaints which I do not believe to be relevant to more general questions.  Another point that was made was that one should not stress the making of a complaint prior to litigation because in truth the consideration of a complaint can and should be dealt with at the same time as ie alongside the litigation.  In today’s world with the emphasis on cost and case management, that is not a realistic submission.  There is no reason why parties should be compelled to incur one set of court costs while there is another ADR process going on at the same time and possibly a duplication of time.  The essence is to save costs and the way to do that is to stop the litigation costs from running while there is another cheaper alternative.  
36.	Mr Tividar suggests that often stays would not be appropriate because the claim is defended.  If I may say so, that is an absurd suggestion.  Precisely because claims are defended, there is an issue between the parties which needs to be resolved.  If the claims were admitted then nothing that I say will be of any significance.  There are many cases which are defended and defended vigorously which nonetheless end up in settlement.  There may be cases, including the cases here, where the bank has filed a defence but where, once the matter has been dealt with under the Scheme, the complaint will be upheld, or sufficiently upheld.  
37.	I have dealt so far with the question of a claimant who will face at least the risk of adverse costs orders if he brings to court the PPI claim without having made a complaint under the Scheme.  I have dealt with one consequence, which is where Halsey would apply, where the claim is litigated to success but nonetheless the claimant may be deprived of some or all of their costs.  Of course, the more likely scenario now I apprehend is this, that if a claimant brings such a claim, then it is likely, in the usual run of cases that he will be met by a prompt application to stay the proceedings on the grounds that a complaint under the Scheme should be made and should have been made previously.  It is unlikely that the banks will want to wait too long because time and costs will be incurred in the meantime and the longer that the bank leaves it before making such an application, the more it may face arguments that it has been made at too late a stage.  
38.	In the usual run of cases, it seems to me, having regard to all of the principles that I have expressed above and where a claimant brings a claim without having engaged in the Scheme, it is likely that the court will order a stay at an early stage in order to facilitate ADR via the Scheme.  In the overall scheme of things, a stay for an eight-week period, the period being that in which the banks are mandated to deal with the complaint, is both modest and proportionate.  That being so, a claimant who hereafter resists an application for a stay for eight weeks to allow for consideration of the complaint under the Scheme, is very likely to be ordered to pay the cost of that application, assuming it succeeds.  In other words, costs will follow the event.  Mr Taylor invited me to pronounce further in general terms, namely that such a claimant would also be at risk of paying the Bank’s costs of the litigation thus far.  That seems to me to be less clear.  First of all, at the stay stage, the court will not know at that point whether the litigation will eventually cease or not. It will if the complaint is upheld and the Bank may choose to come back to the court and seek its costs of the litigation on the basis that it should never have been started.  On the other hand, of course, if the complaint is rejected and the litigation is restarted then the outcome of that litigation is likely to be of critical importance in terms of the recovery of the parties’ costs of that litigation.  So for my part, I limit my general observations to the risk which I have described of the claimant ending up paying the costs of the application made against him for the stay of the proceedings.  
General Guidance 
39.	Drawing all of those threads together and in order to provide some general guidance with the caveats I have already mentioned, I can re-state my observations as follows:
(1)	A person who has or considers he has a PPI mis-selling claim should obtain the standard complaints form and send it to the relevant institution and on the face of it, he will be entitled to expect a determination within eight weeks.  If the complaint is not upheld within the Scheme, or if there has been no determination of it at all within the eight weeks, and no reasonable explanation for any delay is given and there is no reasonable request for a modest extension of time, it will usually be difficult to characterise as unreasonable that person’s subsequent decision to litigate his claim;
(2)	That is of course subject of course to then following the correct procedure for making of any such claim.  In that regard, I have in mind in particular again the Practice Direction on pre-action conduct and in particular paragraph 7.1.  What that paragraph requires any client to do before starting proceedings is that he should set out the details of the matter in writing by sending a letter before claim to the defendant.  The defendant should give a full written response within a reasonable period. A reasonable period of time according to 7.2 will depend upon the circumstances.  I, for my part, take the view that even if a complaint is rejected or has not been dealt with in time, it is still incumbent upon a claimant to write a letter before claim but obviously that may be in more succinct or summary form than would usually be the case because the bank is already in possession of the facts of the claim from the complaint form.  The bank should not expect all of that to be regurgitated in the letter.  Equally, in such circumstances, what is a reasonable period within which the bank should respond must be conditioned by the fact that it is already familiar with the claim.  I am not going to attempt to lay down any particular time limit by reference to a number of days, save to say that in these circumstances the banks can expect a relatively short time within which to make their response;
(3)	In my view the letter before claim procedure is still valuable because, particularly if the bank has not dealt with the complaint in time, this may serve as a wake-up call to it to deal with the complaint there and then so that litigation is avoided. The final chance offered by the letter before claim should not be dismissed simply because there has already been a complaint made under the Scheme;
  
(4)	It must then follow in such a case, ie where the bank has dismissed a complaint or has failed to deal with it in time, that once proceedings have been started the bank is likely to face a significant burden if it nonetheless it comes to court and asks for a Scheme Stay because for obvious reasons, because the bank has already had opportunity to do just that;

(5) 	Of course, in individual cases, there may still be a good reason for a stay depending on the particular form of ADR offered, the timescale in which it is offered, the history of litigation and so on, but where a complaint has been tried and failed the court naturally would wish to be satisfied that a yet further stay at this point is a worthwhile course.  If on the other hand a claimant does not make a complaint within the Scheme but proceeds immediately to litigation, even with a letter before claim, he will be at risk (a) of the imposition of a Scheme Stay shortly thereafter, and (b), as I have indicated, in paying the costs of that application for a stay.  There may however, be particular circumstances where it is necessary to commence litigation and I have indicated that by reference to the example of limitation;

(6) 	Sometimes a claimant may have enunciated a claim against a financial institution, (certainly in the past, hopefully less so in the future), without using the standard complaint form, perhaps because he has already been represented by a claims management company, or a firm of solicitors have articulated the claim in a different way.  If so and if a financial institution now wishes to avail itself of the guidance given above, it follow that it must respond to that claim and, however it perceives that claim to have been framed, should invite a complaint to be made under the Scheme and provide a copy of the form.  Then the claimant knows what must be done and the bank has the comfort of knowing that the complaint will be made at least by using the standard form.  Once invited to make a claim in that way, the claimant will have no excuse if he simply fails to engage with the Scheme.  
The instant cases 
Scheme Stay? 
40.	That is all that I propose to say by way of general guidance and I now turn to the particular issues arising in the cases before me.  I deal first with the Andrew claimants where, as I have indicated, they have agreed to a Harrison Stay but say that they would not have agreed to a Scheme stay and should not pay any costs because that application, had it been the only one, would have failed.  I take the point that letters before claim at least were sent by Ultimate Law to the Bank and on the face of it were not responded to.  It is fair to say, as Mr Taylor reminds me, that in one of those cases over a year passed before litigation commenced.  Mr Taylor also says that, in any event, those letters were written as precursors to litigation and not as complaints.  I think there is less force in that point because the reality is that the Bank could, certainly after June 2011 when the Scheme was fully in force, have responded by asking the claimant to fill in a complaints form.  It may have taken a narrow view of what it was required to do where a complaint as such was not intimated to it in the past. But as I have said  a different approach would be taken in the future.  
41.	So to that extent it can be said there has been a degree of delay on the part of the Bank in engaging with the complaint and a degree of justification in the claimant saying there is no alternative but to litigate the matter. But this had this been an effective application, the question before me would have been whether, despite that history, I should nonetheless order a Scheme Stay now.  In my judgment I would have done.  What has gone in the past is not necessarily an indication of what would happen in the future and the whole basis of the application of the stay, as the proposed order makes clear, is that the Bank will indeed engage with the complaint to be made, within the 8 week period.  It is impossible to see why in claims which have been recently stated, an 8 week period would cause any real prejudice or why, despite the absence of a response previously, the offer of treatment under the Scheme should be regarded as made in bad faith or devoid of utility.  
42.	Therefore it seems to me that Mr Tividar cannot succeed in his primary costs submission, which is that, since this application was bound to fail, he should have his costs of resisting it, but neither, in my judgment, should the Bank have its costs. I can at this point take into account the fact that there appears not to have been a response, which gives more justification for the commencement of the proceedings. I can also take into account that one reason why the matter became academic is because those acting for the Andrew claimants, wisely and correctly in my view, took the view that the sensible course was to agree a stay on the Harrison basis.  
43.	Finally, I cannot ignore the fact that the application which has been put before me has at least given this court the opportunity to make some general observations which may be of use hereafter.  For all of those reasons, the costs order I make in relation to the Banks’  application for the Andrew claimants is “no order as to costs”.  That concludes all that I need to say so far as the Andrew claimants are concerned.
Harrison Stay? 
44.	I then turn to the Gatley claimants.  Dealing first with the form of order, as I have indicated, Mr Walker says that there is nothing objectionable in the form of order proposed, recognising that it does not debar any suggestions or engagement with any other form of ADR.  I will return to costs matters in relation to that in a moment.  That leaves as a substantive issue between the Gatley claimants and the Bank the question of whether this court now ought to prospectively order a stay on the assumption that the Scheme Stay proves not to be successful on the Harrison basis and drawing upon the guidance and the rulings that I gave in Barnes. 
45.	I can deal with these matters fairly shortly. One of the key points that arises from my decision in Barnes is a view which was shared by HHJ Chambers QC two days earlier in a decision in Cardiff that the Supreme Court is likely to take a fairly general look at the question of unfair relationships, given that that matter has not been before it before and, indeed, has hardly ever come before the Court of Appeal.  In general terms, Mr Walker reminds me that Lord Justice Tomlinson said at paragraph 4 of his judgment that the issue before the Court of Appeal was a relatively confined one.  For the reasons that I have given in the Barnes judgment, which I do not intend to repeat here, that is far from the end of the story because what is of relevance now, whether strictly to be regarded as obiter or not, are the pronouncements which the Supreme Court will make and how they will affect any trial judge dealing with the relevant PPI cases. What that then leads to is a consideration as to what in fact is at stake in each of the claims brought by the Gatley claimants.  
46.	So far as that is concerned, I can dispose of the case of Draper in short order. There is no unfair relationship claim made here at all, nor is there any extortionate credit bargain claim.  I can see no useful purpose is staying those proceedings and I refuse any prospective stay application in that regard.  Obviously, if that case proceeds and its nature or shape changes so as to bring in more within the ambit of Harrison, any application to stay can be renewed.  One hopes, of course, that all of this is academic if the complaint itself is to be resolved in favour of the claimant in the next eight weeks. 
47.	So far as Gatley and Shier are concerned, different considerations apply.  It is right that there is no claim based upon the non-disclosure of commission or at least expressly the role of any commission paid plain in the price of the premium.  On the other hand, the question of cost is most firmly raised. The allegation is made that the PPI policy was “phenomenally expensive” and much more expensive than cover that could have been purchased otherwise in the market.  It is correct that that allegation is made within the context of a claim based on the breach of the ICOB rules and not unfair relationship but it resurfaces in the section again at paragraph 31, which is an unfair relationship claim, and paragraph 36 relates to the price of the PPI, and it would be very odd if in that particular context the allegation that it was phenomenally expensive did not really surface.  Paragraph 37 refers to the overpriced product.  Therefore the question of cost, either in absolute or in comparative terms, is very firmly raised within the unfair relationship context and that is one of the matters which will be dealt with by the Supreme Court.  
48.	So, on the face of it, the Gatley and Shier cases fall within the territory on which a Harrison Stay should be ordered.  Mr Walker says, in relation to Shier, that limitation has been taken by way of defence and the reply on the part of Mr Shier is to invoke lack of knowledge until 2011 under section 14A.  Mr Walker says that if there is delay until next Spring, the ability to run that argument is going to be inhibited.  I cannot see why that should be so.  The basis on which the knowledge was acquired in 2011 is likely to be something to do with having been given appropriate advice or matters of that kind and I cannot see how the ability to prove those matters will be lessened by the passage of time between the date when a trial could have been given, which of course is not now in any event, but no earlier than late Autumn, and the time of the Supreme Court decision.
49.	Mr Walker says that in addition to that, there is the question of memories fading. I have already dealt with that to some extent in the context of the Scheme stay.  There is no specific evidence before me about why that is likely to be a real problem here except that the Harrison Stay point only arose recently but on the other hand Mr Walker elected to deal with that point substantively today. I reiterate the point that I made in the Barnes judgment, which is that, certainly in the absence of any specific evidence or particular prejudice, these cases, which are old, the agreements being made in 2002 and 2004, may already have faced memory problems and I doubt whether the passage of further months until next year is going to make any difference and, in any event, there is no reason at all why those acting for Mr Shier should not take full witness statements now so that the matters are refreshed by him, if indeed they have not already done so.  
50.	For those reasons, I will order a stay on the Harrison basis prospectively to take effect after the termination of the eight-week stay in relation to the Scheme, assuming of course that the court has not been informed in the meantime that the matter is now settled as a result of a successful complaint.  I only add this, that I will give general permission to apply to either party to remove the prospective stay on the Harrison basis if some particular matter arises which I consider requires the question of a longer stay to be revisited and that will allow the court to review the matter if something else arises. 
51.	I have then to deal with the question of costs in relation to the Gatley claimants.  They have in fact agreed a stay on the basis sought in the application notice and that agreement came before today, I think on 13th June.  No order for costs was proposed, although the consent that was being offered was simply to an eight-week stay.  That has been rather over-elevated in my view.  Mr Walker, or those instructing him, objected to the Bank’s formulation on the basis that there was nothing wrong with his side’s formulation, but if there was nothing wrong with the Bank’s formulation either, it is a rather arid dispute to bring before the court today. I encouraged both parties to take a sensible view and to hive off any issue about the order or costs to a more informal telephone hearing that could have been arranged next week.  In the end, those acting for the Gatley claimants elected not to take that course.  To that extent, that sounds in costs against them.  On the other hand, and rather like the Andrew claimants, in the Gatley claimants’ cases, letters before action were sent and they were not responded to and they were not treated as a complaint or dealt with as such.  To some extent, that counts against the Bank in terms of costs. Although Mr Walker has come today and dealt with the Harrison Stay and has lost on that point, I do not think that that sounds in costs against him because it was raised relatively recently and he took the sensible course of enabling the court to deal with all the relevant matters raised in one go today, at least as far as the Harrison Stay is concerned.  Equally, he has come to court and provided assistance to the court in relation to general matters over the Scheme stay.  
52.	In all of those circumstances, I make the same order as I do for the Andrew claimants; that is as between the Bank and the Gatley claimants, there is no order as to costs.  As far as I can tell, I have dealt with all matters before me unless anyone would like to tell me otherwise.