Milne v Open Access Finance Ltd & Anor

Sections 140 B(8) and 141(5) of the Consumer Credit Act 1974 do not impose an inflexible requirement that every potentially affected lender must be joined individually. The statutory requirements operate in accordance with the rules of court, including rule 19.6 of the Civil Procedure Rules 1998.

A representative order may therefore be made where numerous lenders have a sufficiently common interest and representation advances the overriding objective. The representative must, however, be suitable. An agent whose interests may conflict with those of the represented lenders is unsuitable, particularly where early settlement is realistically possible.

The claimant appealed against an order made by Chief Master Marsh on 10 September 2019. The order appointed Open Access Finance Ltd as representative defendant for the lenders who had made loans to the claimant through its peer-to-peer lending platform.

The claim included relief under sections 140 B and 141(5) of the Consumer Credit Act 1974. The claimant argued that every lender had to be joined and identified. He also challenged the appointment of Open Access Finance Ltd as representative because of potential conflicts of interest, and sought information about corporate lenders.

The central issues were whether a representative order was legally available, whether Open Access Finance Ltd was a suitable representative, and what disclosure should be made concerning corporate lenders.

1. The appeal succeeded in part. A representative order was permissible, but Open Access Finance Ltd was unsuitable to act as representative. The order was varied to substitute a suitable individual lender, subject to further directions.

2. Section 141(5) of the Consumer Credit Act 1974 is expressed generally and is not confined to claims brought by creditors. However, its requirement that all parties to a regulated agreement be joined is subject to the words permitting provision by rules of court.

3. Section 140 B(8) similarly gives a party a right to have persons who might be subject to an order made parties, but that right operates in accordance with the rules. It does not override ordinary procedural rules, including limitation rules or rule 19.6 of the Civil Procedure Rules 1998.

4. The purpose of sections 140 B and 141 is to ensure that persons against whom an order may be made, and persons whose rights may be affected, are bound by the decision. A representative order can achieve that purpose if represented persons are notified of the order and of their ability to apply to vary it.

5. Given the common interests of more than 600 lenders, individual joinder would be disproportionate and detrimental to the efficient conduct of the litigation. A representative order was therefore justified. The lenders had to be notified, and the First Defendant was directed to compile and preserve a list of their contact details for possible enforcement.

6. Open Access Finance Ltd could not properly represent the lenders because its interests might conflict with theirs in conducting and settling the litigation. Its interests included defending claims against itself and protecting its business model, whereas many lenders had relatively small sums at stake and might favour early settlement.

7. The identity and registered office details of the corporate lenders were to be disclosed. Their business activities might establish a material difference between commercial and non-commercial lenders. The claimant could seek their joinder and variation of the representative order if appropriate.

8. The claim was to remain in the High Court. The consumer credit claims procedure in Practice Direction 7B was disapplied because it was unsuitable for litigation of this complexity. The respondents were awarded three-quarters of their appeal costs.

• High Court (Chancery Division): On 10 September 2019, Chief Master Marsh made a representative order appointing Open Access Finance Ltd to represent the lenders.
• High Court (Chancery Division): The order was varied on appeal. A representative order was upheld, but the representative was changed to a suitable individual lender, limited disclosure concerning corporate lenders was ordered, and the respondents received three-quarters of their appeal costs.