Legal issues for the UK consumer finance industry
On 1 April 2019, the UK Financial Conduct Authority took over regulation of claims management companies (CMCs) in England, Wales and Scotland. CMCs had previously been registered by the Claims Management Regulator (a part of the Ministry of Justice). The FCA has issued a press release stating that more than 900 CMCs have registered for a temporary permission while they apply for authorisation from the FCA.
The FCA has also published a webpage on using CMCs.
On 29 March 2019, the UK Financial Conduct Authority published its final instruments and guidance that will apply if the UK leaves the European Union without a deal or an implementation period.
On 29 March 2019, the Consumer Credit (High Net Worth Exemption) Instrument 2019 came into force. This amends CONC App 1.4.3R(2) by adding the Association of Accounting Technicians to the list of bodies whose members can provide a statement of high net worth under CONC App 1.4.
The appeal concerned the calculation of the limitation period for a negligence claim against trustees under a scheme of arrangement. The scheme allowed claims to be submitted before the ‘bar date’. Claims could be made up until midnight on the ‘bar date’.
The Court of Appeal decided the cause of action accrues at midnight, not after.
Irwin LJ noted, and Underhill LJ agreed, midnight deadline cases differed from others because a midnight deadline provides a categorical indication of when the cause of action accrues (ie midnight). There were no questions of fractions of a day which, there may have been if the deadline stipulated, say 9am or 3pm.
The Court of Appeal’s decision is a must read for anyone dealing with litigation issued at or near the expiry of the limitation period.
On 28 March 2019, the UK Ministry of Justice published a consultation over imposing a fixed costs regime for parties involved in civil claims with a financial value of up to £100,000. It’s proposed the fixed costs will be assessed by reference to a grid of costs.
The consultation period ends on 6 June 2019.
On 25 March 2019, the Treasury made the Payment Accounts (Amendment) (EU Exit) Regulations 2019. This will make a number of amendments to (amongst other things) the Payment Accounts Regulations 2015.
The Regulations come into effect on ‘exit day’.
On 26 March 2019, the Information Commissioner’s Office (the ICO) published a press release confirming it had fined Grove Pension Solutions Limited £40,000 for breaching the Privacy and Electronic Communications Regulations 2003 (PECR) by being responsible for almost two million spam direct marketing emails.
The ICO decided Grove Pensions Solutions Limited had instructed a marketing agent to use third party email providers to carry out hosted marketing campaigns that advertised the company’s services.
Grove Pensions Solutions Limited has sought advice from a data protection consultancy and legal advice on its planned activity. But the ICO decided Grove Pensions Solutions Limited received “misleading advice”. For more information, please see the Monetary Penalty Notice.
This penalty notice shows two things: (a) the ICO’s continued enforcement action for breaches of PECR and (b) the importance of good advice.
On 26 March 2019, the UK Financial Conduct Authority published a consultation paper, CP 19/14, called ‘Mortgage customers: proposed changes to responsible lending rules and guidance’ (the CP).
The CP proposes to revise the creditworthiness and affordability rules for certain customers who want to switch products, or re-mortgage with another lender, where:
– they are up to date with their payments under an existing regulated mortgage contract (and have been for at least 12 months) but are unable to do so because they do not meet the FCA’s detailed rules (which were introduced in April 2014 following the Mortgage Market Review); and
– they don’t want to borrow more (excluding any product or arrangement fee for the transfer or re-mortgage).
The CP contains the FCA’s proposed changes to the Mortgages and Home Finance: Conduct of Business sourcebook to (amongst other things) (a) relax those rules in certain circumstances and (b) contact customers who may be eligible.
The consultation period ends on 26 June 2019.
On 21 March 2019, the European Court of Justice gave its decision in Pouvin v Electricité de France (Case C 590/17) on whether a French electricity provider (EDF) was a supplier for the purposes of the Unfair Contract Terms Directive (93/13/EEC) (the UCTD). EDF provided a loan to one of its employees and his spouse to buy a house. The ECJ decided EDF was acting for purposes relating to its “trade, business or profession” and was therefore a supplier for the purposes of the UCTD.
Because the employee was classed as a consumer, the French court must therefore consider if the terms of the loan are fair under France’s laws implementing the UCTD. The broad interpretation of the definition of “supplier” helped achieve the UCTD’s objective of protecting the consumer (as a weaker party) and making sure there was balance in the relationship.
On 25 March 2019, the Treasury made the Mortgage Credit (Amendment) (EU Exit) Regulations 2019. This will make a number of amendments to (amongst other things) the Mortgage Credit Directive Order 2015.
The Regulations come into effect on ‘exit day’.