Casehub Ltd v Wolf Cola Ltd

An assignment of a quantified restitutionary claim is not necessarily a bare cause of action. It may be valid where the assigned right to recover the money is itself acquired and the cause of action is incidental to that right. The court must consider the transaction as a whole, including whether the assignee has a legitimate and genuine commercial interest and whether the arrangement threatens the integrity of the legal process. Representative-action questions should not be decided where they do not arise on the pleaded facts. Under section 64(1)(b) of the Consumer Rights Act 2015, a cancellation fee forming part of the contractual price cannot be assessed for fairness insofar as the challenge concerns the overall price by comparison with the services supplied. Other unfairness challenges remain possible.

Casehub Ltd acquired assigned claims from three customers of Wolf Cola Ltd. The customers had paid cancellation fees after terminating minimum-term cloud-storage contracts when they had not received login details. Casehub sought recovery of the fees in Part 8 proceedings.

The court was asked whether the assignments were void for champerty or maintenance, whether CPR Part 19.6 permitted a representative action involving customers with separate contracts and different losses, and whether the cancellation-fee provisions were excluded from fairness assessment under Part II of the Consumer Rights Act 2015.

1. Assignments. The assignments were not void for champerty or maintenance. The charges paid by the customers were quantified sums which were the subject of restitutionary claims. Casehub acquired the right to those sums, and the right to bring the restitutionary claims was incidental and subsidiary to that acquired right. The fact that repayment was disputed did not affect assignability.
2. The court considered the whole transaction. Casehub had a legitimate and genuine commercial interest in enforcing the assigned claims. The arrangements improved access to justice for customers whose individual claims were too small to pursue economically, reduced inequality of arms, transferred litigation risk away from customers, and did not create a material risk of inflated damages or abuse. The claimant was also exposed to adverse costs orders and possible security for costs. These considerations provided strong public-policy reasons for upholding the assignments.
3. The assignment under which the customer received 60 per cent of any recovery was an absolute assignment of the whole claim. The customer’s retained share was a contractual obligation owed by Casehub after recovery, not a retained part of the claim.
4. CPR Part 19.6. The representative-action issue did not arise. Casehub sued in its own name under valid assignments. The court therefore declined to decide whether customers with separate contracts and different ascertainable losses could sue representatively or obtain pecuniary relief.
5. Cancellation fees. Applying Office of Fair Trading v Abbey National plc and others [2009] UKSC 6, the cancellation fees formed part of the price payable under the contract. Section 64(1)(b) of the Consumer Rights Act 2015 excluded a challenge based on the overall proportionality of that price by comparison with the services supplied. The provision could nevertheless be challenged on other grounds of unfairness.
6. Declarations were granted that the assignments were not void for champerty or maintenance and that the cancellation-fee provisions formed part of the price for section 64(1)(b) purposes.