Canada Square Operations Ltd v Potter
[2023] UKSC 41
Smith and another v Royal Bank of Scotland plc
4 October 2023
[2023] UKSC 34
Supreme Court
Two people sued a bank for secretly taking a huge cut of their insurance payments. The bank said they waited too long to sue, but the Supreme Court said the clock only starts ticking after the credit agreement ends, not when the insurance payments stopped. The bank had to pay back the money.
Key Facts
- •Two former credit card holders (Smith and Burrell) brought small claims against the Royal Bank of Scotland (RBS) for mis-sold PPI policies.
- •RBS received undisclosed large commissions on the PPI policies.
- •Claims were brought more than 10 years after PPI policy termination but less than 6 years after credit card agreements ended.
- •Both claimants were initially successful in lower courts but RBS appealed.
- •The Court of Appeal dismissed the claims, stating the time limit had expired.
- •The Supreme Court granted permission to appeal due to the general importance of the issue.
Legal Principles
Time limit for applying for a remedial order under section 140B of the Consumer Credit Act 1974.
Consumer Credit Act 1974, sections 140A-C
Definition of a 'cause of action' as a set of facts entitling a person to a remedy.
Letang v Cooper [1965] 1 QB 232
Section 9 of the Limitation Act 1980 sets a six-year limitation period for actions to recover sums under any enactment.
Limitation Act 1980, section 9
The burden of proof is on the creditor to prove that the relationship is not unfair (section 140B(9)).
Consumer Credit Act 1974, section 140B(9)
Deliberate concealment of facts relevant to a claim may postpone the running of the limitation period (section 32(1)(b) Limitation Act 1980).
Limitation Act 1980, section 32(1)(b)
In assessing unfairness under section 140A, the court considers the whole history of the relationship, even events preceding the agreement.
Consumer Credit Act 1974, section 140A
The court has broad discretion in deciding what remedial order, if any, to make under section 140B.
Consumer Credit Act 1974, section 140B
The court's assessment of fairness under section 140A is based on the present state of the relationship, unless that relationship has ended.
Consumer Credit Act 1974, section 140A(1) and (4)
Delay in bringing a claim can be a factor in the court's discretionary decision on whether to grant relief under section 140B.
Consumer Credit Act 1974, section 140B
Outcomes
The Supreme Court allowed the appeals and reinstated the lower court's orders.
Claims were not time-barred because a claim under section 140B can be made at any time while the credit relationship is continuing, and the relevant relationship continued beyond the six-year limitation period. The court also found that the relationships remained unfair at the point they ended.