In the context of how the “unfair relationship” provisions of the Consumer Credit Act 1974 apply to PPI mis-selling cases Harrison v Blackhorse remains the authorative ruling. The compromise reached by the parties in Holdstock v Endeavour deprived the Court of Appeal of an early opportunity to revisit the important decision it made last year. For how long remains to be seen.

Currently before the Court of Appeal there are two applications by borrowers who have applied for permission to appeal against decisions which unequivocally applied “Harrison” when dismissing allegations of PPI mis–selling.  The relevant cases are:-

 1)                 Conlon v Black Horse a decision of Wilkie J who reversed the first instance ruling that failure to disclose the commission (arising out of a PPI policy) constituted an “unfair relationship”.  From a creditor’s point of view the positive impact of “Harrison” was demonstrated by the Judge’s clear statement that “the decision of the Court of Appeal on this issue is binding on me on this point.  It cannot properly be distinguished by me.  In those circumstances, I am obliged by precedent to uphold the appeal of Blackhorse on this case and I do so”.  The Court underlined the point of principle set out in “Harrison” – compliance with the governing industry (specific) regulations should prevent a finding of Unfair Relationship under the less specific legislation.

 2)                 Plevin v Paragon which involved another robust application of “Harrison”.  Noting significant (and all too common) differences between the borrowers’ witness statements and evidence actually given at court, the estimated legal costs of £320,000.00 and that the claim had been “over complicated by the way in which it had been presented” Recorder Yip had little hesitation in dismissing template style allegations of PPI miss–selling.

  In view of recent favourable case law any judicial suggestion that the scope of “Harrison” can be restricted (and hence its value as a precedent diluted) will be of concern to lenders.

For further information please contact Jeremy Bouchier – Senior Solicitor.

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