Major blow for claims management companies in landmark court case
The embittered claims management sector has been dealt another blow after a judge at the Manchester Mercantile Court ruled that lenders can still enforce debts even if the original loan agreement has been lost or destroyed. The decision to hear a number of test cases at the court came as a result of the number of claims management companies bringing county court cases regarding the enforceability of pre-April 2007 Consumer Credit Act (CCA) agreements.
The purpose of the judgment was to give general guidance about these cases, in the hope of narrowing down or eliminating the issues that have arisen in hundreds of similar claims brought to county courts across the UK.
Eight cases were selected involving five banks and four firms of solicitors acting for the plaintiffs, with the Office of Fair Trading (OFT) also being represented. The hearing was held between 30 November and 4 December 2009, with the significant judgment issued on 23 December 2009.
The judgment was a complex one running to 59 pages, however essentially the judge threw out both the legal basis on which the cases were brought and the cases themselves, in a decision that could affect thousands of potential claims management cases.
According to reports, the judge wanted some proof, rather than just assertion, that there was either no signed agreement or an improperly executed one. The judgment says a S78 (Section 78 of the Consumer Credit Act) copy need not be a copy of the signed agreement showing the customer’s and the bank’s signatures and that in the absence of evidence to the contrary the court would accept that if standard practice complied with the Act then the disputed agreements would remain in force.
