Clydesdale Financial Services Limited t/a Barclays Partner Finance, R (on the application of) v The Financial Ombudsman Service Limited

Permission for judicial review should be granted where the proposed grounds are properly arguable and it cannot be shown that the outcome would highly likely have been the same under Senior Courts Act 1981, section 31(3C) and (3D). Where an Ombudsman’s assessment of fairness under section 140A of the Consumer Credit Act 1974 depends on the cumulative effect of several factors, the court should not assume that the same conclusion would follow from one factor alone. An alleged breach of the Timeshare Regulations may be just arguable as a matter relevant to the fairness of the credit relationship, even though the court does not finally determine that issue at the permission stage.

The claimant creditor sought permission to apply for judicial review of a Financial Ombudsman decision under section 228 of the Financial Services and Markets Act 2000. The Ombudsman had upheld a complaint concerning finance provided for the purchase of a fractional timeshare product.

Calver J had refused permission, holding that one ground was unarguable and that, in any event, the outcome would not have been substantially different because of an unchallenged breach of regulation 14(3) of the Timeshare Regulations 2010. The claimant challenged that approach and relied on four grounds concerning valuation information, the relevance of regulatory breaches to section 140A of the Consumer Credit Act 1974, contractual terms and the operation of those terms. The issue was whether the grounds were arguable and whether permission should nevertheless be refused under section 31(3C) and (3D) of the Senior Courts Act 1981.

1. Permission granted. Permission to apply for judicial review was granted on all four grounds.
2. The Ombudsman enjoys a broad discretion when deciding what is fair and reasonable in all the circumstances. The court will generally intervene only for an error of law. That principle did not justify refusing permission where the proposed grounds were properly arguable.
3. It was inconsistent to refuse permission on grounds comparable to those for which permission had been granted in the related Shawbrook proceedings. The existence of different providers meant that the related proceedings would not resolve every issue arising in this claim.
4. The claimant’s argument that the Ombudsman was not entitled to take an alleged breach of regulation 14(3) of the Timeshare Regulations 2010 into account when assessing the fairness of the credit relationship under section 140A of the Consumer Credit Act 1974 was just arguable.
5. The court could not conclude that it was highly likely that the Ombudsman would have reached the same decision if the claimant succeeded on the other grounds. The fairness conclusion had been based on the cumulative effect of a range of factors, so the outcome could not be assumed to follow from the regulation 14(3) breach alone.
6. There was a wider benefit in determining the challenges concerning the contractual terms and the appropriate remedy, given the number of similar complaints and the Ombudsman’s treatment of the case as a lead case.

High Court (Administrative Court): Calver J refused permission on 16 May 2022. Lang J granted permission on all grounds in [2022] EWHC 2438 (Admin).