Jones v Link Financial Ltd

A legal assignee of rights under a regulated consumer credit agreement may become the statutory “creditor” under the Consumer Credit Act 1974 where the assignment is completed by notice and the assignee must perform the statutory enforcement duties attached to those rights. The assignee is not contractually undertaking the assignor’s duties; rather, it cannot enforce the assigned rights without complying with the statutory conditions governing enforcement. An equitable assignment without notice does not generally transfer those enforcement responsibilities. The Act is not to be construed so as to make assigned contractual rights unenforceable. Even if an assignee were not a statutory creditor, the Act would not remove the assignee’s substantive right to sue for the assigned debt.

Mrs Jones appealed from a decision of His Honour Judge Butler in the Blackpool County Court concerning Link Financial Ltd’s claim as assignee of sums due under a regulated consumer credit agreement originally made with GE Money Consumer Lending Ltd.

The county court held that GE Money had complied with the statutory and contractual requirements for enforcement and that the assignment was a valid legal assignment under section 136 of the Law of Property Act 1925. It nevertheless accepted the argument that an assignee did not fall within the statutory definition of “creditor”. The appeal concerned the proper interpretation and application of the Consumer Credit Act 1974 to contractual assignments.

1. The appeal was dismissed. The legal assignment to Link was valid, and Link could enforce the assigned debt.
2. Section 189 of the Consumer Credit Act 1974 expressly contemplates that an assignee may become a “creditor”. The reference to the passage of “rights and duties” does not prevent that result merely because ordinary contractual assignment transfers rights rather than contractual obligations.
3. Where there is a legal assignment and notice has been given, the debtor’s liability is owed to the assignee. The assignee must perform the statutory duties relating to enforcement, including duties concerning information, notices, settlement figures and termination statements. The assignee cannot assert the assigned rights without accepting those statutory conditions.
4. An equitable assignee without notice is in a different position. The debtor remains legally liable to the assignor, which remains responsible for the relevant enforcement duties. Different considerations may apply to pre-assignment liabilities under sections 75 and 75A.
5. The court accepted the analogy with an assigned contract containing an arbitration clause. An assignee is bound by the arbitration clause because it cannot assert the assigned right inconsistently with the obligation to arbitrate, as explained in The Jordan Nicolev [1990] 2 Lloyd’s Rep. 11 and DVA v Voest Alpine [1997] 2 Lloyd’s Rep. 279.
6. Section 141 did not require a different result. Even if a legal assignee were not a statutory creditor, the Act would not deprive it of its substantive right to sue for the assigned debt under the ordinary jurisdiction.

• High Court (Queen’s Bench Division): Appeal from the Blackpool County Court decision of His Honour Judge Butler dated 6 June 2011. The appeal was dismissed.