17th March, 2017

Andrew Clark is successful in the Supreme Court in opposing an application to reverse the costs order in Plevin.

On 12 November 2014, the Supreme Court found that the relationship between Mrs Plevin as debtor and Paragon Personal Finance Ltd as creditor was unfair to her within the meaning of s.140A of the Consumer Credit Act 1974, owing to its failure to disclose the amount of commissions paid to it and to a broker, L.L. Processing (UK) Ltd, in respect of her purchase of PPI in connection with its loan to her (Plevin v Paragon Personal Finance Ltd [2014] UKSC 61). Accordingly, on 5 February 2015, the Supreme Court awarded the costs of the appeal in the Supreme Court to Mrs Plevin and affirmed the order of the Court of Appeal awarding her the costs of the appeal in the Court of Appeal.  However, on 4 April 2016, Paragon applied to set aside and/or reverse that order on the basis that on 18 October 2011, which was before both appeals and, indeed, before the original trial in the County Court, she had applied for and received compensation from the Financial Services Compensation Scheme (FSCS) in respect of her claim against L.L. Processing (in liquidation), which required her agreement to the FSCS' standard terms. Those terms included assignment to the FSCS by an applicant receiving compensation, not only, of his or her claim against the relevant person in default, but also, of any "Third Party Claims" being claims against other parties, "arising out of the circumstances giving rise to the Claim or otherwise relating to that claim."

Andrew Clark made written submissions to the Supreme Court opposing Paragon's application on 20 April 2016. He made further written submissions on 27 June 2016 in response to submissions in reply by Paragon. In those submissions, he relied (among other things) on the inconsistency in Paragon seeking to reverse the costs order, but not seeking to set aside the substantive decision. Further, he argued that, where the FSCS compensates an applicant in respect of a claim against a broker for mis-selling PPI, the "Third Party Claims" assigned to the FSCS do not include any unfair relationship claim against a lender based on non-disclosure of the PPI commission. He appeared before the Supreme Court on the hearing of a related application in the case on 6 February 2017, but was not called upon to speak.

The application was considered by the Panel of the Supreme Court that heard the original appeal. On 15 March 2017, the Panel dismissed the application with costs. Their main reason was that the proceedings, including the appeal, had been conducted on the basis that Mrs Plevin's right to sue was undisputed and, since Paragon was not inviting the Supreme Court to reject her claim on the basis that she had no cause of action, costs must be awarded on the same basis. Further, and of wider significance, the Panel stated that it would in any event have rejected the contention that she no longer had a cause of action, because her claim against Paragon was not a "Third Party Claim", since the liabilities of Paragon and LLP arose out of distinct agreements, which gave rise to distinct roles in the transaction and distinct duties to Mrs Plevin.      

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