English and Welsh Courts - Miscellaneous

IN THE ALTRINCHAM COUNTY COURT
Trafford Courthouse Ashton Lane

		Claim No. 1IR15921 Sale
		7th March 2014

1. THE DISTRICT JUDGE: On 8^th September 2011 the claimants in this case, Mr and Mrs Burns, issued a claim against the defendant, Santander UK PLC, claiming damages for the alleged mis-selling of a payment protection insurance policy. The policy which was sold by the defendant to Mr and Mrs Burns was financed by a fixed sum loan agreement between the parties dated 24^th November 2005.
2. There are, essentially, three heads of claim advanced on behalf of Mr and Mrs Burns who were represented by solicitors. First, that Santander represented that the policy was compulsory, secondly, a breach of the Financial Services Authority's insurance conduct of business rules when selling the policy and/or that the relationship arising out of the agreement was unfair within the meaning of Section 140 of the Consumer Credit Act 1974. There is nothing unusual about the arguments advanced. They were advanced in thousands of cases around the country. Just let me note, at this stage, that this claim was incorrectly pleaded as being worth between £5,000 and £15,000. Even if contractual interest was taken into account – and I do not necessarily accept that for allocation purposes that it should be – the value of the claim was still not worth more than £5,000. This was always going to be a claim which, on value alone, would have been allocated if defended to the small claims track. Be that as it may, on 24^th November 2011 before any defence had been filed and, therefore, before the claim had been allocated to any track, Mr and Mrs Burns and Santander settled the claim. Santander agreed to refund all of the payments made by Mr and Mrs Burns towards the policy from the date of agreement to the date of settlement together with interest at 8% per year. That settlement amounted in total to £1,852.66. A Tomlin Order was approved by me, coincidentally, in this court and as part of the terms of that Tomlin Order the defendant was to pay the claimants' costs to be the subject of a detailed assessment if not agreed. The detailed assessment proceedings were commenced and the total bill submitted on behalf of the claimants was, I think, £9,026.72. Points of dispute were served and replied to. The case was listed for a provisional assessment. The defendant objected to that provisional assessment taking place on the basis that they had a preliminary issue which they wished to argue before the court. That preliminary issue is that, irrespective of the order for costs which was made in the Tomlin Order, the costs which were actually payable by the defendant to the claimants should be limited to those which would have been recoverable had the claim been allocated to the small claims track. The defendant prays in aid of their argument a Court of Appeal decision in O'Beirne v Hudson handed down on 9^th February 2010 reported at [2010] 1WLR 1717 the neutral citation being [2010] EWCA Civ 52. I have been referred in particular to paragraph 19 of the judgment and that is Lord Justice Waller. He laid down the following test:

"The court should ask itself whether it is reasonable for the paying party to pay more than would have been recoverable in a case that should have been allocated to the small claims track. Was it, for example, necessary to have had lawyers? Is it reasonable for the paying party to have to pay for lawyers? Those are questions that should arise where a claim should have been allocated to the small claims track."

3. If we therefore now look at the matter and ask whether the claim should have been allocated to the small claims track the court, of course, is directed to CPR 26.8. There is a long list of factors to be taken into account. I do not have to consider all of them because the claimants are saying that the only factors which are relevant to allocation - other than to the small claims track in this case – are factors (c): "The likely complexity of the facts, law or evidence; the number of parties and the amount of oral evidence which the court would have to receive." As far as likely complexity of facts, law or evidence are concerned in my view, and in this case, I respectfully agree with the judgments of His Honour Judge Kay and His Honour Judge Simpkiss in the cases of Gillies v Blackhorse Limited and Loughlin v Blackhorse Limited – I accept that they are both first instant cases but they are persuasive – I agree with the observations that as far as the factual disputes in this case are concerned it is relatively straight forward. In other words: "Was there a misrepresentation made by the defendant or an employee of the defendant to be precise which induced the claimants to enter into the contract for payment protection insurance?" I accept that there are legal arguments of some complexity which are pleaded but if one actually strips away the unnecessary complexity with respect of those arguments most of these cases boil down to: "Was there or was there not a misrepresentation made by the defendant?" If the court finds in favour of the claimant on that fact then, in my view, the claimant is likely to succeed. I also take into account the fact, as submitted by the defendant, that by early 2012 when this case is likely to have been allocated some of the, perhaps, novel points of law which were being raised in these cases had, to a certain extent, been clarified. As far as the number of parties are concerned, there were two claimants and one defendant and as far as oral evidence is concerned, again, there would be two claimants; there would be the person who actually sold the policy to the defendant and, I am told, the financial compliance officer from the bank. In my view, there is nothing there which a court, applying strict rules on witness statements standing as evidence in chief could not have dealt with within a day.
4. Taking into account, therefore, all of the factors in CPR 26.8 including the financial value of the claim, the nature of the remedy sought, the factors which I have mentioned, the importance of the claim to persons who were not parties and the circumstances of the parties, it is my view that this case, had it been defended, should have been allocated to the small claims track. I mention at this stage that both parties have given me a schedule showing that some claims at this time were being allocated in some courts to the fast track and some claims were being allocated to the small claims track. With respect, that is not of any particular help to me. The test I have to apply is, whether in my view, the claim should have been allocated to the small claims track and, therefore, whether the costs which are recoverable by the claimant in this case should be limited to those which would have been recoverable in a small claim. In my view the answer to that question is: "Yes" and the costs which are therefore recoverable by the claimants from the defendant will be limited to the fixed costs which would have been recoverable had the case been allocated to the small claims track.
(End of Judgment)



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