Limitation of PPI claims and the OR

Shop Direct Finance Company Limited (SDFC) offered credit terms to consumer purchasers of goods purchased from the Very Group. In mid-2019, the OR made a bulk complaint to the Financial Ombudsman Service in relation to the mis-selling of PPI on behalf of bankrupt consumers.

Given the intersection between financial services regulation (specifically references in the delegated legislated to “eligible complainants” and “complainants”, the latter of which is undefined), and personal insolvency (specifically the nature of the OR’s functions), and given the number of cases potentially impacted by the decision, the case was considered by the court to be of general public importance.

The court gave declaratory relief to the effect that, whilst the OR could not be an "eligible complainant", it was the “complainant”. The OR was authorised by law to bring the complaint on behalf of the bankrupt consumer through the vesting of such statutory right upon appointment. It was not viable to have two complainants (ie, the individual bankrupt and the OR), and it followed that the OR’s date of knowledge is the date that should be used to determine whether a complaint is time-barred.

The court refused to make any further declaratory relief meaning that SDFC has the burden of establishing actual or constructive awareness of relevant cause for a complaint more than three years before the date of the referral in mid-2019.

Whilst the case is specific to PPI and the interpretation of delegated legislation, office holders should be mindful that, upon an estate vesting, they may acquire knowledge in respect of limitation of a claim, notwithstanding that they are neither principal nor agent.

Shop Direct Finance Company Limited v The Official Receiver [2022] EWHC 1355(Comm)

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