Wilson and others v. Secretary of State for Trade and Industry (Appellant)

The interpretative duty in section 3 of the Human Rights Act 1998 does not ordinarily alter substantive rights arising from a completed private transaction before the Act commenced. A declaration of incompatibility could not therefore be made in this case.

Article 6 protects procedural access to a court. It does not guarantee particular substantive contractual rights. The statutory refusal to enforce an improperly executed consumer credit agreement did not engage article 6. Even if the creditor's possessions were affected for article 1 purposes, the automatic sanction was a proportionate consumer-protection measure. The creditor could not avoid that sanction through restitution.

Parliamentary material may inform a Convention-compatibility assessment, but courts must not judge legislation by the quality of the reasons advanced during parliamentary debate.

Mrs Wilson borrowed £5,000 from First County Trust Ltd and pawned her car as security. A £250 document fee was wrongly included in the stated amount of credit. The county court held the agreement enforceable but reopened it as an extortionate credit bargain.

The Court of Appeal first allowed Mrs Wilson's appeal, holding that sections 61, 65 and 127(3) of the Consumer Credit Act 1974 made the agreement and security unenforceable: [2001] QB 407. At an adjourned hearing it declared section 127(3) incompatible with article 6(1) and article 1 of the First Protocol: [2001] EWCA Civ 633; [2002] QB 74.

The Secretary of State appealed. The principal questions were whether the Human Rights Act 1998 could affect this pre-commencement transaction, whether either Convention right was infringed, whether restitution remained available, and how parliamentary materials could be used in compatibility proceedings.

1. Disposition. The House unanimously allowed the Secretary of State's appeal and set aside the declaration of incompatibility.

2. Temporal operation of the Human Rights Act. Lord Nicholls, Lord Hope, Lord Scott and Lord Rodger concluded, by overlapping routes, that section 3 of the Human Rights Act 1998 could not be used to alter substantive rights and obligations arising from this completed pre-commencement transaction. Fairness and legal certainty supported the presumption against that result. The Court of Appeal therefore could not make the declaration. Lord Hobhouse agreed that the Act did not change the parties' substantive rights, although he considered that section 4 jurisdiction existed in the abstract and that the declaration was gratuitous and improper.

3. Article 6. All five Law Lords concluded that article 6(1) was not engaged. Per Lord Nicholls, the article protects access to a court for determination of arguable domestic rights. It does not prescribe the substantive content of those rights. Section 127(3) of the Consumer Credit Act 1974 restricted the creditor's substantive right to enforcement; it was not a procedural bar to adjudication.

4. Article 1 of the First Protocol. The Law Lords differed on engagement but agreed that there was no incompatibility. Lord Nicholls treated the statutory extinction of contractual and security rights as a deprivation of possessions. Lord Hope and Lord Scott considered that the creditor never acquired an unqualified right to enforcement. Lord Hobhouse proceeded on the assumption that article 1 could be engaged if there had been a true pledge. On the assumption that article 1 applied, the automatic sanction was proportionate. Parliament could adopt a uniform and severe sanction to secure compliance with important consumer-credit formalities and protect vulnerable borrowers.

5. Restitution. Per Lord Nicholls, Lord Hope and Lord Scott, the creditor could not recover the principal through unjust enrichment or another common-law remedy. Sections 65, 106, 113 and 127 showed that Parliament intended the lender to be left without recourse when enforcement was irredeemably barred. A common-law remedy would defeat that intention.

6. Parliamentary materials. Per Lord Nicholls, with the other Law Lords agreeing in substance, Hansard and other parliamentary materials may exceptionally supply relevant background about a statutory measure's object, practical effect or social context during a Convention-compatibility assessment. Courts must not treat ministerial statements as Parliament's intention, give them determinative weight, or assess proportionality by the cogency of reasons advanced in debate. Evaluating the adequacy of Parliament's deliberative process would contravene article 9 of the Bill of Rights 1689.

1. House of Lords: In Wilson and others v Secretary of State for Trade and Industry [2003] UKHL 40 , the House unanimously allowed the Secretary of State's appeal and set aside the declaration of incompatibility.

2. Court of Appeal, adjourned hearing: In Wilson v First County Trust Ltd [2001] EWCA Civ 633 ; [2002] QB 74 , the court declared section 127(3) of the Consumer Credit Act 1974 incompatible with article 6(1) and article 1 of the First Protocol.

3. Court of Appeal, initial hearing: In Wilson v First County Trust Ltd [2001] QB 407 , the court allowed Mrs Wilson's appeal and held that the agreement and security were unenforceable.

4. Kingston upon Thames County Court: Judge Hull QC held that the £250 fee formed part of the credit and that the agreement was enforceable. He reopened the agreement as an extortionate credit bargain and reduced the interest by half.