England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
LONDON MERCANTILE COURT

		29th June 2015

HHJ WAKSMAN QC:

Introduction

1. The claimant in this action, All Property Claims Limited (APC), is a claims management company specialising in property damage insurance claims. It claims £5,056.80 from the defendant, Mr Pang Tang. The money is due pursuant to a written agreement made on 15^th November 2010.
2. The full service provided by APC to clients like Mr Tang is:

(1) The notification to the relevant insurer of a claim made by the client, for example, for household water damage.

(2) The negotiation with the insurer for a settlement for the claimant.

(3) Carrying out the necessary repairs using the settlement monies.

3. Provided that APC carried out the repairs, there is no fee as might have been charged by a loss adjuster hired by the client for their notification and/or negotiation services. The client therefore gets those services free of charge but if either before or after APC has reached a settlement with the insurer the client dispenses with their services and chooses someone else to do the repairs, he becomes liable for the work done by APC at a time charge rate of £140 plus VAT per hour.
4. In this case APC negotiated a settlement of £14,256.04 with Mr Tang's insurers, Zurich Insurance PLC, Zurich, in respect of his water damage insurance claim. On the day that this was confirmed Mr Tang terminated the agreement with APC and collected the settlement monies from Zurich himself and later instructed other contractors to do the works. In those circumstances APC say that their fee for the work done on the basis of £140 per hour plus VAT fell due, being the £5,056.80 claimed.

The issues

5. Mr Tang has defended the claim. That defence is been funded by Zurich, which has also agreed to indemnify him against any adverse costs order. It has funded and agreed similarly to indemnify him in respect of a part 20 claim he has brought against ITC Compliance Limited (ITC). For the purposes of section 39 of the Financial Services and Markets Act 2000 APC was at the material time an appointed representative of ITC, which itself carries on business as a network of insurance intermediaries. Mr Tang contends the following by way of defence:

(4) the agreement is governed inter alia by the Cancellation of Contracts made in a Consumer's Home or Place of Work etc Regulations 2008 and no written explanation was given to Mr Tang as to his rights to cancel the agreement, contrary to regulation 7(6) thereof; accordingly the agreement is unenforceable as against him;

(5) there were elements of APC's website, the printed terms of the agreement and the accompanying mandate in respect of claims against the insurers and APC's own explanation of its service to Mr Tang which were unfair, unclear and misleading; this amounted to a breach of rules of 2.2.2 and/or 4.3.1 of the Insurance Conduct of Business sourcebook (ICOBS). While those rules only bound ITC directly and not APC, it is said that it was an implied term of the agreement that APC would comply with the ICOBS rules and accordingly APC was in breach thereof. Mr Tang then claims damages in the form of an amount which would reduce or extinguish the sum claimed by APC if it fell due at all and/or

(6) the term of the agreement pursuant to which APC makes its claim, clause 2, is unenforceable as being in breach of regulation 5 of the Unfair Terms in Consumer Contract Regulations 1999 (the Unfair Terms Regulations) as is clause 5 and/or

(7) the assignment of the claim to APC provided for by the agreement and/or the mandate attached to it was ineffective in particular because of the prior breaches of the Unfair Terms Regulations and/or Cancellation Regulations or a breach of the Client Asset Rules (CASS).

6. A yet further ground of defence is that clauses 2 and/or 5 and/or the assignment provided for by the agreement were in breach of the Consumer Protection from Unfair Trading Regulations 2008 via paragraph 14(a) thereof, which itself derives from the Consumer Protection Amendment Regulations 2014. These apply only to contracts entered into or payments made on or after 1^st October 2014. Neither of those conditions are satisfied in this case and accordingly the Consumer Protection Regulations of 2008 and 2014 are irrelevant. I reject the invitation to consider them in any event and to consider declaratory relief to assist in future cases. That would be hypothetical and an entirely disproportionate and unnecessary exercise here, especially given the plethora of actual defences put forward.
7. In addition Mr Tang brings claims against ITC for breach of ICOBS and/or CASS contending that the damages should be equal to an indemnity against any sum found to be due by Mr Tang to APC.
8. Given the sum claimed, this action would normally have been dealt with as a small claim, although I accept it was not actually allocated to that track here; but it was transferred into this court by order of HHJ Mackie QC on 2^nd October 2010 on the basis that Zurich, the funder behind Mr Tang, wanted certain issues of principle in relation to the defences referred to above to be decided as they could affect similar claims by APC or other claims management companies. That said, the recital to that order limited the costs of all parties to those which would be recovered in the county court.
9. ITC defends the claim made against it.

The evidence

10. For APC I heard from Andrew Davis, a leak detection specialist; Mr Moez Kara APC's Claims Surveyor; Mrs Roshan Kara, one of APC's property insurance claims managers; and Matthew Bright, another of APC's property insurance claims managers. For Mr Tang I heard from him alone. ITC did not call any evidence. In addition there is a substantial body of contemporaneous documents, principally emails, which have been of considerable assistance. I deal with the witnesses' evidence in detail below but in general I have found all of APC's witnesses reliable but I found Mr Tang has been an unsatisfactory witness, whose evidence was unreliable in certain key respects.

The facts

11. APC's website contains the following sections: in bold and quite large type it says:

"Get an insurance quote, agree your claim and complete all repairs in one amazing free service."

12. Depending on which version one has, there is then under it in quite small print the words, "Subject to terms and conditions," and in the colour version that I have there is the same rubric at the top but then there is an asterisk and then one side underneath it says, "Subject to terms of business available on request." Underneath that there is a section that says:

"AllPropertyClaims will survey the damage draw up a specification repairs, prepare a quote for insures, negotiate and agree repairs with your insurers or their loss adjusters, carry out all building works and get your property back to the way it was in record time. Our service is second to none and is completely free."

13. Another page then sets out the stages of work which APC do under the heading "What we do," and that includes starting the work three days after the costs are approved and when the work is finished, "We send the bill to insurers -you pay nothing." Another section under, "Why use us?" says:

"As a result of our dealings with loss adjusters and insurers we have developed good working relationships based on trust, respect and professionalism. It is these relationships which allow us to get the best result from the claim and deliver the high level of service which property owners have a right to expect."

14. Later on the same page they say they are proactive with insurers:

"Typically our average time from notification to settlement of a claim is 3-4 weeks. We start drying / restoration cleaning and or reinstatement within 48 hours of settlement and will typically take 2-4 weeks to complete works depending on the scope."

15. A final section includes the words:

"It's your right to have a suitably qualified company to handle your insurance claim -the service we provide and our FCA registration allows you to appoint us."

16. It is common ground that the terms and conditions referred to were not available directly from the website. It is also common ground that no potential client could contract with APC online. They had to sign a hard copy written agreement, which would be done at home when Mr Kara or another surveyor would call to take details of the claim and obtain instructions to proceed.
17. In this case Mr Davies, whose company is called UK Leak Detection Limited, visited Mr Tang on 13^th November 2013 to ascertain the cause of the water damage to the floor in his apartment because Mr Tang could not find the source. Mr Davis found it: a "hot leak" in the water system and which had by then caused considerable water damage requiring works of repair and reinstatement after a period of drying out. He charged and was paid for the written leak report he made and recommended APC as a company which could handle the claim for Mr Tang as well as doing the work. Having looked at APC's website, Mr Tang contacted APC, which led to an email from Mrs Kara. She states, "All Property Claims specialise in dealing with property insurance claims," and that the service was completely free, "if All Property Claims carries out all building and drying works at the property." She refers to them coming to the property to survey the damage and then to propose a list of itemised costs and then settle and negotiate claims directly with the insurers and their adjusters. Once they are authorised they would carry out the works with the tradesmen and invoice the insurer direct. "We don't charge the client for this service but instead ask our contractors to give up part of the margin on the works which we regularly pass to them and this provides a convenient cost free solution to the property owner," and there is later reference to the website. This led to a visit to Mr Tang's apartment on 15^th November 2013 by Mr Kara. There is no dispute that in the course of that visit Mr Kara took photographs and noted down details of the damage, nor is there any dispute that Mr Tang signed the various contractual documents proffered to him.
18. What is very much in dispute is what Mr Kara told him about the contract that he entered into, what Mr Tang himself read either then or later and what in any event he understood was the position, in particular with regard to any fees payable to APC. Before dealing with those matters I refer to the contractual documents themselves. The first page is not actually a page of the contract. It is an instruction to the insurer to be sent to the insurer by APC on behalf of the client and headed "Mandate" and then there is a section which says:

"We appoint and authorise APC irrevocably to act on our behalf in relation to the claim and instruct the insurer to deal with solely with APC on our behalf in relation to the claim for APC to:

To discuss the details of the claim.

To negotiate the claim with the insurer until a settlement is reached.

To receive payment of all monies in relation to the claims, the money to be payable to APC.

To instruct contractors of APC's choice to undertake the reinstatement works.

To make all appropriate payments to the contractors."

19. That is then signed by the client as a policyholder or an interested party and that is dated but underneath that there is a separate section which says:

"We hereby give you notice that in accordance with the contract of today's date we irrevocably assign all our rights under the policy of insurance to APC. Such assignment enables APC to proceed directly for the recovery of any sums under the policy. These sums may be a final settlement of any monies due from us to APC. The assignment shall remain in force until APC has received all monies due to it or until APC provided us with written notice of our rights under the policy be reassigned to us. The assignment shall be made in force notwithstanding termination of contract."

20. One then turns to the contract itself and it is a one-page document. It is headed "Terms of Business". Clause one refers to APC as being an authorised representative of ITC, regulated by the FCA. "Termination, however arising, does not terminate the provisions of the mandate." The services are then set out, which start from attending the premises, going through conducting negotiations following settlement, appointing contractors to carry out the works and project managing the reinstatement. Then it says:

"If you instruct us in the performance of all of these aspects of this claim, which you do by signing these terms of business, we will waive the fee for our services. However, you will be liable to pay our fees in the following circumstances:

(a) In the event the insurer offers a settlement of the cost of reinstatement and you decide not to carry out the works.

(b) If you contract your own contractors to carry out said works or to carry out works yourself.

(c) You request or accept in cash the cost of reinstatement works directly from the insurer.

In the event (a), (b) (c) occurs we can elect to terminate the agreement, you agree to pay our fees (our fees are charged at an hourly rate of £140 per hour plus VAT) prior to an offer made to the insurers towards the cost of the reinstatement work settlement. After settlement our fees are charged as our loss of profit from works we have been unable to carry out, cost of any work carried out and aborted costs following our issuance of purchase orders to our contractors. We may terminate the contract on seven days written notice and you will be liable for fees if any of the following events occur:

You cancel the contract.

You request the insurers not to negotiate with us and the insurer is willing to negotiate.

You object to our settling the claim on the basis of the scope of work we consider acting reasonably to be fair, given our assessment of insurers' liability.

You fail to provide information to enable us to arrive at a settlement.

You prevent, obstruct or interfere or delay unreasonably from the starting, progressing or completing of the works or refuse to allow solicitors to release in advance final payment to us."

21. And certain other matters are dealt with. As to the quality of the service and the client is told of their right to apply first of all to APC, and the, if it is dissatisfied to the Financial Ombudsman Service. Clause 4 says that APC is regulated by the Financial Services Compensation Scheme. Clause 5 refers to an assignment. It says:

"The contract and the mandate to be provided act as an effective irrevocable assignment of your rights under this policy of insurance in relation to the claims and we may pursue the insurer for recovery of money under the policy which are due from the claims without further reference to you. You agree the assignment will remain in force until they have received the monies and in settlement of the claim. If the contract is terminated we may pursue the insurers for claims under the policy in an amount which would equal the sums due to us from you under this contract and this does not affect their right to pursue the client under clause two and the assignment will remain in force until all the sums are recovered and this clause remains in force notwithstanding termination of the agreement."

22. There is then reference to personal information, jurisdiction and severance and then underneath all the numbered clauses and underlined there is a section which says:

"I understand that in signing this contract I accept the terms and conditions herein, I may be liable to pay fees pursuant to the terms in paragraph 2 above. I understand I shall be liable to pay VAT on invoices sent to insurers if I am VAT registered and insurers have deducted VAT from the settlement. I agree to pay APC the excess deducted by insurance on the settlement prior to the start of the building works."

23. Immediately under that to the left-hand side there is a line for signature by the client, then the name in capitals and then the date. Then across the page there is a section saying: "Notice of your right to cancel this contract." The contract date is given. It says:

"You have entered into a contract with APC. You may cancel the contract with us at any time during the next seven calendar days following the contract date written above by completing and returning the below cancellation form or by giving us notice you wish to cancel in writing. If you cancel after seven days you will be liable to pay our fees. The cancellation form may be sent."

24. Then it gives a postal address and then there is part of a form which would be filled in the event that cancellation was effected.
25. Mr Kara's evidence is that when he arrived at Mr Tang's apartment he first went through the agreement with him while they were both sitting down. He read aloud to Mr Tang all three pages referred to above, save that he did not read out the second part of clause 2 from the words "after settlement". He said that if (a), (b) and (c) did not apply, Mr Tang would not pay a fee and that if Mr Tang wanted to use another builder he should not sign because he would be liable for APC's fees at £140 per hour. He said that in practice APC's clients rarely had to pay their fees because they did instruct them to do the work. He read the later clauses and in particular he read the words in bold. He also read in full page three. He then asked Mr Tang to sign the two sets of documents, two copies thereof, which he did. One set he put in his briefcase and the other went in a presentation folder which was intended to be left with Mr Tang. I will deal later with what happened to the folder but I next deal with Mr Tang's version of events.
26. Mr Tang has a bachelor's degree in business studies and a master's degree in marketing and management from Middlesex University. He first worked for the Insurance Legal and General for seven years on the financial and management accounting side and then worked in the City on market information and analysis for another insurance company, Gerling. He was then a management accountant at Clifford Chance for two years before taking his present job at the insurance broker Marsh as a market information analyst. He is clearly intelligent and obviously has a knowledge of the insurance industry. He is also well capable of reading and understanding documents and if presented with a contract I have no doubt he would not sign unless he understood it fully first. He made a number of detailed enquiries to APC before 15^th November 2013 and asked Mr Davis a number of questions about any claim arising out of the water damage and referred to the fact that loss adjustors normally charge fees. His evidence as to what happened on 15^th November in relation to the making of the agreement was inconsistent and implausible, in my view. In particular:

(1) He said he knew that if they did the work then there would be no fee payable by him and they would get a cut from the building works. He then said that he had "no idea" what would happen if they did not do the works.

(2) He said that he read "3" and then he changed it to "2" on the bullet points at the top part of the mandate section and then stopped reciting the bullet points further in terms of what he said he read and he said he read nothing else on that page. To stop at that point makes no sense. I think he stopped reading out the parts that he said he had read, fully aware that if he did he would be going on to say he was going to be instructing them to receive the monies and to do the work and he stopped there to avoid admitting that.

(3) He then said that he "flicked through" snippets of the following page which contains all the terms and had no idea what it was that he read. I find that implausible but, in any event, if he cannot now recall what he read, he cannot say what he did not read, in particular the particular parts in the clauses and the bold sections.

(4) In paragraph 16 of his witness statement he refers to "densely typed parts and small print" but first of all it is not that small. Secondly, he is experienced in reading documents. Thirdly, it does not address what he understood of the underlined section immediately before signatures. That section is simply not addressed at all in paragraphs 14 to 17 of his witness statement.

(5) He accepted broadly that Mr Kara read to him page one and as far as page two was concerned he said that Mr Kara read page two but not the section on the fees payable if the work was not done. That is extremely unlikely, in my view, and I do not accept Mr Kara would have missed them out or that Mr Tang did not hear him at that point. It would no sense for Mr Kara to say, as Mr Tang accepts he did, there would be no fee if they did the work but not to go on and say what would happen if they did not do the work. Mr Tang refused to accept that the final section above the space for signature had been put in bold and underlined in order to bring it particularly to his attention and make it obvious. That refusal was absurd since clearly this was the purpose of the section. Mr Tang later said that he just signed without reading in depth because he "trusted them", even though (a) he had never dealt with APC before, and (b) according to paragraph 8 of his witness statement he thought that Mr Kara was "cold" when he first arrived. In addition to this unsatisfactory evidence of the day in question, Mr Tang's evidence on other matters was unsatisfactory and further reflects adversely upon his general credibility as a witness. I deal with those further matters below but take his lack of credibility there into account here.

27. As against all that I found Mr Kara's account of what happened to be straightforward and reliable. Accordingly, I find that Mr Kara did say and read out what he said he did, which would include the terms as to what would happen if APC did not do the work and in particular the charge of £140 per hour and that he read out the bold and underlined section. I also find that Mr Tang heard all of that and understood it and moreover that he read the key parts of the contract itself, including the bold and underlined section, before he signed. He therefore knew that if he did not instruct APC to do the work he would then have to pay a fee of £140 per hour for their time and finally that he confirmed to Mr Kara that he understood the terms of the contract. I am also quite sure that when he did eventually receive his own hard copy of the contract documents he would have read them again, though he denies this. Once Mr Tang's copy of the signed contractual documents was put into the presentation folder, Mr Kara's intention was to leave them with Mr Tang obviously. He said that he proffered the folder towards Mr Tang who did not take it and so it was left on the table. Unfortunately Mr Kara subsequently picked it up and used it like a clipboard on which he put his notes when going around the property. On finishing that task Mr Kara then put the folder back in his briefcase by mistake instead of leaving it with Mr Tang. Although in his witness statement at paragraph nine Mr Tang said that APC had "claimed" that Mr Kara took the documents away accidentally, thus hinting that APC took them away deliberately, in evidence he accepted it was a genuine mistake, as do I. Later that same day an email was sent from Mrs Kara to Mr Tang saying:

"Our surveyor has just called to advise us he accidentally picked up your copy of the forms which were signed on site. As soon as he returns to office we will send these to you by post and also mail you a scanned copy."

28. Mr Tang replies: "No problem and many thanks." In fact they were not emailed on that day because on Monday the 18^th Mr Tang emailed Mrs Kara to say: "Could you email a copy of the scanned forms for my reference." She replies: "Please see attached as requested," on the same day, "You should also have received the originals by now as they were posted out on Friday by first class post."
29. By 19^th November 2015 APC's extensive and detailed schedule of works had been prepared (see pages 141 to 155) and it was sent to Zurich the same day along with the mandate.
30. On 25^th November 2015 Mr Bright learnt that Zurich had not appointed a loss adjuster to deal with and agree the claim but rather a company called BCS who could look at the schedule of works and inspect the property but then had to report back to Zurich who would have to agree the claim itself as this was not delegated to BCS. APC had had some experience of BCS's involvement and the delays caused thereby and Mrs Kara advised Mr Tang about this by telephone on 26^th November. A BCS representative came to the property on 28^th November. Having arrived late he did not bring a moisture meter. The need for Mr Tang to have alternative accommodation was stated and Mr Chowdry, the representative, said he would report back to Zurich.
31. APC then had to chase Zurich for a response to the schedule which it had provided on 19^th November and there were quite unacceptable delays by Zurich, who by now acted through Mr Robert Hansford in their investigations department. It was and remains wholly unclear why Zurich acted in this way given that not imputation of wrongdoing was made by Zurich as against APC and in the end Zurich was forced to apologise to Mr Tang and pay compensation. Finally on 20^th December Zurich, having transferred the case from Mr Hansford (who was rarely available) to Karen Dalunde-Robinson, Zurich made an offer of £7,000 on 20^th December and sent BCS's schedule of works. There were many other things missing and other discrepancies in that scope of works. Mr Bright sent a detailed email on this subject after the Christmas break on 2^nd January (see pages 119 to 192).
32. This was referred back to BCS and on 17 January Zurich made an increased offer of £10,180.14. On the same day Mr Bright sent a long email pointing out all of the discrepancies and omissions which remained. This referred to the claim for alternative accommodation and it ended by saying:

"Due to the large number of omissions still remaining on this claim and the lack of any reasoning/commentary for their continued omission… … we are losing faith in the competency of your representatives at BCS. Given that 16 days have passed since my email highlighting the omissions and the receipt of the (inadequate) response with little progress, may I suggest a proper loss adjuster is appointed to provide a fair and acceptable scope of works. Failing this our client will have no choice but to appoint an independent RICS surveyor and charge insurers for the cost of this independent view on the matter."

33. A further response came from BCS via Zurich on 24^th January and Mr Bright wrote back yet again to point out further deficiencies on 27^th January. In that email however he also proposed a lower sum to Zurich on the basis that the scope of works could be reduced by doing repair and not replacement, however and importantly he made it clear in that email if by doing this, items became unavoidably damaged then there would be claimed for additional sums by way of variations (see pages 244 to 245). The revised figure put forward by Mr Bright was £11,202.61 including VAT to which would have to be added certain further itemised costs and dry costs. Then on 28^th January Mr Bright wrote as follows:

"It is two months since we visited the property. Not only are there still omissions, we have not received confirmation of the costs. I propose revised costs of £11,202.61. I am not willing to spend another five days waiting for a response on these items and neither is the policyholder. I therefore propose a total cost for reinstatement of £11,500. In addition to this the drying costs need to be agreed. I suggest we the example of two previous complaint cases…"

34. He sets out what that figure is and therefore arrived at a total proposed cost of £14,256.04 including VAT. This led to a telephone conversation between Mr Bright and Miss Robinson when she said that Zurich agreed that sum, at 11.35 am. She sent a confirmatory email authorising the repairs and the associated costs at that figure.
35. Before going further with the chronology I should refer to what Mr Tang said he had been doing over this period. In paragraph 28 of his witness statement Mr Tang said he had decided to deal with Zurich himself prior to 28 January but in truth he did none of the negotiations at all. This was all left to APC. In evidence he said however that he had helped to "progress the claim". That was not true either. It is true that on 18^th December he wrote an email saying:

"Hi Karen. Could you also send me schedule of cost broken down so I can understand how they arrived at their figure. I understand the settlement fee does not include drying costs."

36. That had come after an earlier one where he said:

"I would like to deal directly with you to ensure the matter is dealt with smoothly and as quickly as possible. The survey conducted by BCS took place on 28^th November. I have decided to intervene as opposed to hear from APC. I have not yet seen the breakdown of the quote."

37. And then he set out various matters that needed to be done which were already on the schedule. What is clear by that email is that he, like APC, wanted to ensure the works would include all that had to be done including drying costs, for example. In reality these emails did no more than repeat what APC had intimated in writing some time before. Thereafter he got no speedy response from Zurich and while he was clearly frustrated, so was APC. It is quite plain from the email correspondence that the only party responsible for the delay in reaching a settlement was Zurich, as it recognised when it apologised and compensated Mr Tang.
38. To the extent that it is relevant I acquit APC of any culpable delay in dealing claim. I also acquit APC of somehow over-scoping the claim, i.e. knowingly exaggerating what had to be done, which Mr Tang later alleged on 4^th February when he also said that he understood that APC regularly over-scoped. There was no evidence put forward for that belief and Mr McMeel rightly did not put that allegation to APC at the trial. Of course there was a significant difference between the sum put forward under APC's scope of works, the £24,000, and the settlement figure of £14,000. However there is usually some element of negotiation when claims like this are made and secondly, APC's revised figures contained the caveats about the possible application for further sums referred to above. What happened here was normal as far as I can see and not redolent of some form of attempt to misstate the true works required and the costs thereof. Of course even if an insurer agrees the scope of works required, it can drive down the price by applying a different schedule of rates. At the end of the day it is for the insurer to agree a figure or not.
39. To complete the picture I should refer to emails sent by Mr Tang to APC. On 28^th January he wrote to say that he would take back the full responsibility of pursuing the claim, saying that he had lost trust in using the firm but he then said that could not imagine how long the work was going to take and then he said, "I would therefore request you to invoice me for the work you have done." On 4^th February he complained about the delay, although as I have found those delays lie squarely with Zurich and not with APC. He then complained about APC's unfair terms and said he was not made aware of what would happen if the client had no option but to cancel the contract. He also said that APC even took away the mandate once it was signed so he had no time to read the terms and conditions in the contract (points I have rejected above) He then said APC should no longer carry out any further work and said:

"I am prepared to pay APC a reasonable sum of money for the time spent and I am fully prepared to go to court to settle the case in full if the invoice total is unreasonable."

40. As to all of that there are two points: first, I do not accept that these offers to pay APC for the work done were merely goodwill gestures on the part of Mr Tang as against a belief on his part that he was obliged to pay for them. I think he knew perfectly well he would have to pay their fees for settlement of the claim, although I accept he did not expect there would be a bill for over £5,000 but that was not the fault of APC (as dealt with above). No one could have predicted how protracted this claim could and did become. Mr Tang's offers therefore are further evidence that he was aware of his obligations under the agreement.
41. Secondly, I reject the notion that there was some kind of binding promise that the claim and work should all be completed by December 2013. APC was not in control of the claims process and it acted as speedily as it did in the circumstances and indeed warned Mr Tang when it became apparent that BCS were involved and the matter could take further time. The other points raised by Mr Tang in these emails I have dealt with above.
42. The above are my key findings. In so far as I need to deal with further findings of fact I shall do so in the context of my discussion of the various legal issues raised to which I now turn.

The Cancellation Regulations

43. It is accepted that the Cancellation Regulations applied to the making of the agreements here which took place at Mr Tang's home. Regulation 7(2) says:

"The trader must give the consumer a written notice of his right to cancel the contract and such notice must be given at the time the contract is made except in the case of a contract to which regulation 5(1)(c) applies in which case the notice must be given at the time the offer is made by the consumer."

44. Regulation 7(6) says:

"A contract to which these Regulations apply shall not be enforceable against the consumer unless the trader has given the consumer a notice of the right to cancel and the information required in accordance with this regulation."

45. There was a written notice of cancellation here and it formed the third page of the document signed by Mr Tang, however I cannot see how on any sensible reading of the word "give" it was given to him on the occasion when the agreement was signed on 15^th November because he never took it and after a brief period in fact it was removed from his home, albeit entirely accidentally. That fact of that genuine mistake and the fact that he received it by email the following Monday cannot cure the defect, neither, regrettably in my view, can the fact that, as to which I have no doubt at all, Mr Tang was fully aware of his right to cancel since it was explained to him at the time and indeed in evidence he said he knew of his cancellation right. It is therefore on the facts of this case a wholly unmeritorious technical defence but one which must succeed if regulation 7(6) applies and the agreement as a whole is "irredeemably unenforceable" to adopt the words of Lord Hoffman in Dimond v Lovell [2002] 1 AC 384. Also as made clear in the judgment of Moore-Bick LJ in Salat v Barutis [2013] EWCA Civ 1499 at paragraph 20, there is no power in the court to order enforcement nonetheless as a matter of discretion. Had there been I would have unhesitatingly have ordered enforcement. As it is I regret that I cannot.
46. There can be no room for any waiver or estoppel arguments here to assist APC because any act or statement by Mr Tang that he was nonetheless willing to be bound by the agreement would require knowledge by him that the contract was legally unenforceable against him because of the lack of the cancellation notice. Such knowledge is not alleged nor made out here (see paragraph 22 of the judgment of the Court of Appeal in Salat v Barutis). Nor is there any room for an alternative claim for unjust enrichment on the part of APC since this would run against the policy underlying the Regulations in the analogous case of improperly executed consumer credited agreements the House of Lords so held in Dimond v Lovell (see the section of the speech of by Lord Hoffman headed "Unjust enrichment").
47. That short point on Cancellation Regulations in fact disposes of the claim against Mr Tang but in the light of the other points raised and because my findings there may have a real impact on costs and because this case is in this court because of a number of legal points. I deal with them briefly below.

Breach of ICOBS

48. Section 19 of the act provides as follows:

"No person may carry on a regulated activity unless he is an authorised person or an exempt person."

49. This prohibition referred to is "the general prohibition"
50. One such regulated activity is set out in paragraph 39(a) of The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 headed, "..assisting in the administration performance of a contract of insurance as a specified kind of activity." ITC is an authorised person for these purposes. Section 19 of the Act and its amendments encompasses various insurance related activities, including assistance in the administration and performance of an insurance contract ("assistance").
51. If APC was engaged in that particular regulated activity it would be unlawful unless it too was authorised or it was an exempt person. It was such an exempt person because it was an authorised representative of ITC pursuant to a written agreement between them. If it engaged in the regulated activities of assistance then ICOBS would apply to such activities. However the person who responsible for ensuring that ICOBS was complied with was not APC but rather ITC (see paragraph 1.1.1 of ICOBS). Accordingly, if ICOBS applied and there was a breach by APC, the statutory right to claim damages (now under section 138(d) of the Act) would lie against ITC and not APC.
52. Mr Tang contends that there was an implied term in the agreement to the effect that if APC carried on assistance activities such that ICOBS applied to them, albeit only actionable against ITC, then the ICOBS should apply to APC directly. The modern approach here of course is that set out by Lord Hoffman in Belize v Belize Telecom [2009] 1 WLR 1988:

"The question for the court is whether such a provision would spell out in express works what the instrument, read against the relevant background, would reasonably be understood to mean."

53. I cannot see how the proposed implication here meets that test. Leaving aside the ICOBS regime, there is no warrant for implying terms on the same content of the ICOBS rules. That may be considered desirable and/or reasonable but that is not sufficient, nor does the mere existence of the ICOBS regime and its application to ITC make any difference. Indeed, it could be said that if it had been thought necessary to include authorised representatives as being bound directly, that would have been done. There is a very clear established regime of regulation here established by the act and associated secondary legislation which identifies a clear line of direct responsibility which here goes to ITC. I see no reason why this system should be extended further by use of adopting the implied terms.
54. If there is a breach of ICOBS then Mr Tang had a clear right of redress against the firm, ITC, which can be supposed as likely to be more, not less substantial than the representatives it has appointed. Although not exhaustive or determinative, the old "tests" as implied are still relevant as guidelines and in that context it cannot be said that the proposed implication was necessary whether by reason of business efficacy or otherwise or that it is obvious.
55. Accordingly, Mr Tang has a claim against ITC and ITC alone if there were breach of the ICOBS and that would be a claim in damages. However Mr McMeel accepted that such a claim would only operate by way of some form of reduction or elimination of any sums found due to APC under the agreement. In the event because of the operation of the Cancellation Regulations there is no such claim and accordingly a damages a claim by Mr Tang against ITC falls away. Nevertheless, as these matters have been argued at some length I deal below with APC's position on the footing that either there was still a damages claim against ITC alone or if I was wrong as to the implied term, against APC also for breach of ICOBS.
56. Accordingly, the next question is whether the activities of APC constitute assistance within the meaning of paragraph 39(a) of the order. APC's services typically include:

(1) assisting the insured in notifying a claim, but even if not provided;

(2) providing evidence to support the claim negotiating a settlement with insurers, and then;

(3) receiving the settlement monies from the insurers to do the relevant works.

57. In this particular case APC undertook stage (2). The fact that it was deprived of stage (3) because of the instructions of Mr Tang does not matter since I am considering what its usual and regular activities are. Some help is given here by the Perimeter Guidance Manual, which provides guidance on, among other things, what particular activities would fall within article 39(a). 5.7.1 says:

"The regulated activity of assisting in the administration and performance of a contract of insurance relates, in broad terms, to activities carried on by intermediaries after the conclusion of contract of insurance and for or on behalf of policyholders, in particular in the event of a claim. Loss assessors acting on behalf of policyholders in the event of a claim are, therefore, likely in many cases to be carrying on this regulated activity. By contrast, claims management on behalf of certain insurers is not a regulated activity."

58. In 5.7.4 it says:

"More generally, an example of an activity that, in the FCA's view, is likely to amount to assisting a policyholder in both the administration and the performance of a contract of insurance is notifying a claim under a policy and then providing evidence in support of the claim, or helping negotiate its settlement on the policyholder's behalf. Notifying an insurance undertaking of a claim assists the policyholder in discharging his contractual obligation to do so (assisting in the performance); providing evidence in support of the claim or negotiating its settlement assists management of the claim (assisting in the administration)."

59. Then 5.7.6:

"Where a person receives funds on behalf of a policyholder in settlement of a claim, in the FCA's view, the act of receipt is likely to amount to assisting in the performance of a contract. By giving valid receipt, the person assists the insurance undertaking to discharge its contractual obligation to provide compensation to the policyholder. He may also be assisting the policyholder to discharge any obligations he may have under the contract to provide valid receipt of funds, upon settlement of a claim. Where a person provides valid receipt for funds received on behalf of the policyholder, he is also likely to be assisting in the administration of a contract of insurance (for example, making prior arrangements relating to transmission and receipt of payment)."

60. This guidance therefore clearly points, in my view, to the activities of a claims management company such as APC falling within paragraph 39(a) and for the reasons given in that guidance I consider that they do. Indeed, if they did not, it is unclear to me why their activities would require them to be an authorised representative of ITC unless an exempt person or why they would need, as they have done more recently, to apply successfully for authorisation in their own right with the FCA regulatory regime.
61. Accordingly, it is necessary now to see whether there has been any breach of the ICOBS rules. The relevant rules are as follows: 2.2.2:

"When a firm communicates information, including financial promotion, to a customer or other policyholder, it must take reasonable steps to communicate it in a way that is clear, fair and not misleading."

And under 4.3.3:

"(1) A firm must provide its customer with details of the amount of any fees other than premium monies for an insurance mediation activity.

(2) The details must be given before the customer incurs liability to pay the fee, or before conclusion of the contract, whichever is earlier.

(3) To the extent that an actual fee cannot be given, a firm must give the basis for calculation."

The website

62. The contention here is that the following statements on the website were in breach of either or both of those ICOBS rules because of the statements, "Our amazing free service," or, "Our service is second to none and is completely free." The point is that such services were free but only if the client instructs APC to do the remedial works. The website does not, in my view, sufficiently make clear this qualification. It is true that it can be said to be implicit since their entire services include the remedial works and if that is all completely free, it is also true that there is some attempt to qualify the statements by reference to the words in very small print, "Subject to the terms and conditions," however those terms and conditions are not present on the website. It is true also, as appears below, that the free services and their limitation are expressed perfectly clearly in the contract document and also that one cannot contract online, so the website is for advertising purposes only.
63. Nonetheless, in order to be sufficiently clear (a) the terms and conditions must be available to view on the website in easily readable form and (b) the words "Subject to Terms and Conditions" which appear under the words in larger writing (..One Amazing Free Service) should themselves at least be the same size as the section which follows headed "AllPropertyClaims will survey…" At the moment they appear to me to be somewhat smaller. Those words should then contain a direct link to that part of the website that contains the terms and conditions or at least some other reference to where they would be found on the website.
64. If that is done then I see nothing misleading or unclear in the opening two-line statement in larger type above because, as I have said, if the whole service is provided, it is free and there is an explanation and then there is a clear reference to the terms which are available and which will set out what the qualification is. I take Mrs Kara's point that when being considered for their application for authorisation, the only point taken by the FCA about the website in the FCA's email on 7^th November was whether APC ever did business without the client signing a copy of the terms as said to be available to be request on the website and when Mrs Kara said they did not, the point was taken no further. Nonetheless I have to look at the matter myself and I do consider that there was a limited lack of clarity on the website, which would constitute a breach of 2.2.2 on the basis that the website should display the terms and conditions and the reference to them should be set out as I have said above, otherwise the contract is only made subsequently and face-to-face. I do not consider there is any other breach of 2.2.2 or any breach of 4.3.1.

Mr Kara's representations on 15^th November.

65. It is alleged that Mr Kara misrepresented the free nature of the service at the meeting because essentially he did not qualify it. I have already rejected this on the evidence.

The mandate

66. It is said that there is a further breach of 2.2.2 because of the wording on the mandate headed, "Instructions to my/or insurer." I cannot see how. This was a document which Mr Tang had to sign to enable APC to deal with his insurers. It is not part of the agreement but rather a document consequential on clause 5 of the agreement and indeed a general instruction to APC to pursue the claim on his behalf. It was suggested that the later wording which refers to an assignment of "our rights under the policy" suggested wrongly an assignment of the entire contract of insurance but that is not so. Plainly the rights under the policy assigned are those and only those relating to this particular claim. Read as a whole no insurer could be left in any doubt about that. There is one part of the mandate which could be said to be misleading in one sense, which is the suggestion to the insurer that APC's irrevocable authorisation extends to instructing them to do the building works If by that it meant that even if the underlying agreement had been terminated, APC could carry on remedial works against the will of and without the cooperation of the insured, as it were.
67. However:

(1) that is not part of the agreement with the insured of which the ICOBS must be principally directly; and

(2) it would not seriously operate on the mind of any rational insurer. Indeed, here Zurich willingly agreed to provide the settlement monies direct to Mr Tang as soon as it was asked.

(3) the important provisions as far as Mr Tang or any client were concerned are those in the agreement itself, to which I now turn.

The agreement

68. It is said that clause 2 of the agreement is in breach of clauses 2.2.2 and/or 4.3.2 because the reference to a waiver of fees is in bold whereas the circumstances in which the fee becomes payable are not. There is nothing in this point. First, the bold section ends, "However, you will be liable to pay our fees in the following circumstances." Second, the following words are perfectly legible. Thirdly, this argument entirely ignores the final bold underlined section immediately above the place for signature. It is then said that the fee structure where applicable was not sufficiently explained or detailed. I disagree. The key point is that the time charge is stated at £140 per hour. It is not possible to say how many hours would be likely to be involved since it all depends on the nature of the claim and the attitude and response of the insurer and also perhaps the conduct of the insured. It is true that there is no breakdown in the loss of profit head of claim here but it is difficult to see what more could usefully be said. The main point is the claim is particularised as loss of profit and any sensible reader would know it could only be based on the profit that would be derived from doing the remedial works or a part of it. That in my judgment is a sufficient basis for calculation of any later claim for loss of profits. Accordingly, clause 2 of the agreement is not in breach of ICOBS. (Inaudible) that clause 5 is in breach of clause 2.2.2. This goes back to the alleged ambiguity of the assignment, in other words whether it was after the claim or the policy as a whole. I have already rejected that argument.

Conclusions on breach of ICOBS

69. Accordingly, I find no breach of ICOBS by APC save in the very limited respect concerning the website referred to above. The ICOBS claim is academic in any event because of my finding that the agreement was unenforceable and had damages been a live issue, which they are not, in the circumstances of this case I would award only a nominal amount as against ITC or if there had been a direct claim against APC, as against APC.

Unfair terms

Introduction

70. Article 5 of the 1999 regulations provides that:

"A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer."

71. Article 6 says:

"(1) Without prejudice to regulation 12, the unfairness of a contractual term shall be assessed, taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is dependent.

(2) In so far as it is in plain intelligible language, the assessment of the fairness of a term shall not relate –

(a) to the definition of the main subject matter of the contract, or

(b) to the adequacy of the price or remuneration, as against the goods or services supplied in exchange."

72. Article 7(1) says:

"A seller or supplier shall ensure that any written term of a contract is expressed in plain, intelligible language."

73. Article 8(1) says:

"An unfair term in a contract concluded with a consumer by a seller or supplier shall not be binding on the consumer."

74. Accordingly, a term which would otherwise not be the subject of review under article 5(1) because it dealt with price or the definition of the main subject matter of the agreement becomes so subject if it is not in plain and intelligible language.

Clause 2

75. Paragraphs 98 to 100 of Mr Tang's closing submissions says that clause 2 is not in plain and intelligible language and so becomes subject to article 5. However for all the reasons given above I do not consider that clause 2 is not written in plain or intelligible language. The key points are perfectly clear, in my judgment, and the basis of the fee structure is sufficiently explained. I say that with regard not simply to Mr Tang in particular but to the average consumer (see Chitty paragraphs 15-145 to 146). Accordingly, article 5 is not engaged and that is the end of the matter. However, even if it were there would be no breach. I cannot see how there is a significant imbalance in the rights and obligations of the parties where the simple deal is that provided APC are instructed to deal with the claim all the way through, they will do so at no cost to the insured, whereas if, contrary to the general expectation of the parties, they do not, they should be reimbursed for the work done up to the settlement and for a loss of profit in relation to the building works.
76. In his opening and closing submissions Mr McMeel made generalised references to Director General of Fair Trading v First National Bank plc [2001] UKHL 52, Abbey National plc v Office of Fair Trading [2010] 1 AC 696 and Office of Fair Trading v Ashbourne Management Services [2011] EWHC 1237. He did not identify any particular principle or conclusion which he said would be pertinent to this case and I do not consider those cases take the analysis here any further.
77. Nor do I consider that clause 2 and the sums involved could be regarded as a disproportionately high sum in comparison, if a consumer fails to fulfil an obligation or that APC could dissolve the contract on a discretionary basis whereas Mr Tang could not, that the consumer was bound with no real opportunity to be acquainted with the terms cf paragraphs 1(e), (f) and (i) of Schedule 2 to the Unfair Terms Regulations.

The mandate

78. The mandate is not a contractual term, in my view, so I fail to see how the Unfair Terms Regulations can apply at all. Even if they did I do not consider that it is not in plain or unintelligible language because of supposed ambiguity over whether it is the claim only or the policy as a whole that is being assigned (see above). Even if it were and even if, (which I do not accept), the purported assignment was somehow unfair, I do not see where that allegation goes since what is being claimed here are the fees pursuant to clause 2, not the right to deal with Zurich (which Mr Tang was very happy for APC to do) and where there is no claim by APC as assignee for the benefit of the monies paid over to Mr Tang.

Clause 5

79. There is a very limited and general allegation that clause 5 is not in plain or intelligible language and again a generalised reference to Ashbourne. That is not a proper or sufficient indication of the regulations and, in any event, it is irrelevant because the claim is made under clause 2, not clause 5.
80. Accordingly, there is nothing in any of the unfair terms points.

Conclusions on unfair terms

Clients asset rules

81. Next it is argued that APC was in breach of certain provisions of the FCA's Client Assets Sourcebook (CASS). Paragraph 52 of Mr Tang's defence as against APC and paragraph 43 of the addition claim plead that:

"In purporting to take assignments of policyholders' interests under policies and receiving and handling monies due to policyholders or demanding insurers such as Zurich pay monies properly due to policyholders such as Mr Tang, APC was acting in breach of CASS, the Client assets rules. Neither ITC nor APC is authorised by the FCA to handle client monies or client assets."

82. In fact, as Mr Tang has accepted in his closing submissions, APC was not directly subject to CASS in any event but even as against ITC this is a curious plea since in this case APC never received the settlement monies in any event. Accordingly, it is impossible to see how even if applicable, the particular CASS rules, for example in relation to holding such monies on trust or segregating them or paying them over to the client (see paragraphs 5.3.2, 5.5.3 to 5.5.5) have any relevance here. Once one leaves the facts of this case, the question of the extent to which these rules apply to APC's activities and other such activities might involve a breach thereof are entirely hypothetical and it is neither necessary nor appropriate for me to investigate those issues here further. All that I would add is that on the assumption that the assignment of the claim itself is valid, and for the reasons given above my principal conclusion is that it was, I cannot see how monies would cover the qua "debt" from an insurance company for the purpose of undertaking building works by APC pursuant to the assignment can be viewed as client monies anyway. Accordingly, I find no breach of any applicable CASS rules on the part of ITC.

Assignment

83. Some further generalised points are raised in paragraphs 123 to 127 of Mr Tang's closing submissions as to the validity of the assignment but:

(1) I have already stated that it is being confined to the claim, which Mr Tang through Mr McNeil accepts is capable of assignment, not the policy; and

(2) the point does not assist here since the claim is made pursuant to clause 2.

Quantum of the claim

84. Although issue was taken with the reasonableness or otherwise of some of the hours claimed by APC within its fees of £5,056.80, in particular where time seems to have been incurred either before the agreement was made or after it had been terminated, there were in Mr Tang's closing submissions no particular points taken on quantum by reference, for example, to what APC should be entitled to if not the whole sum. Because of that and because the fees claimed here have in fact failed I say no more about the issue of quantum.

Conclusions

85. Accordingly, APC's claim fails on one very narrow and technical ground, otherwise both on the underlying facts of the case and in relation to virtually all of the multiplicity of other arguments raised it has succeeded. Unfortunately, however, that does not avail APC in relation to the recovery of its fees.
86. I think it is worth stating that in my view Mr and Mrs Kara have behaved very properly and reasonably throughout this entire episode. As against that Mr Tang appears to have embarked on this very lengthy and involved defence of the claim at the behest of Zurich. Were it not for Zurich I cannot imagine this case would not or should not have settled at an early stage.
87. Accordingly, the claim made by APC against Mr Tang must be dismissed. The counterclaim brought by Mr Tang against APC must similarly be dismissed. Mr Tang's part 20 claim against ITC succeeds on the very limited extent of the breach of ICOBS rules referred to above but no damages are to be awarded since they do not arise given the dismissal of the claim.
88. I am grateful to the parties in this case for their assistance. I would like to record that the litigants in person here, being both APC and ITC, have at all times conducted themselves courteously and with not inconsiderable skill, I am obliged to the parties for their detailed opening and closing written submissions, all of which I have taken into account.