Christine Self v Santander Cards UK Limited

Sections 140A and 140B of the Consumer Credit Act 1974 require a fact-sensitive, broad and holistic assessment of whether the debtor-creditor relationship is unfair and, if so, what remedy removes the identified unfairness. FCA DISP guidance creates a rebuttable framework for complaint handling; it does not itself impose a free-standing obligation to pay a prescribed sum. A payment offered and accepted under that framework may therefore provide consideration for a binding compromise of an unliquidated section 140A claim. The court retains jurisdiction to assess fairness after settlement, but should be slow to go behind a bona fide, transparent and fair compromise. Both appeals were dismissed.

These conjoined second appeals concerned PPI policies funded through credit agreements. Each claimant had complained of mis-selling and recurring non-disclosure of commission. The defendants rejected the ordinary mis-selling complaints but offered redress calculated by reference to FCA rules and guidance, subject to acceptance in full and final settlement. The claimants accepted payment and later brought proceedings under sections 140A and 140B of the Consumer Credit Act 1974, seeking further repayment.

The County Court judges held that the correspondence created binding compromises supported by consideration and that the settlements should not be reopened. The issues were whether the FCA framework required payment of the sums offered, whether the payments were good consideration, what claims the settlements covered, and how the court’s residual jurisdiction under sections 140A and 140B should operate after settlement.

1. Both appeals dismissed. The offers and acceptances created legally binding compromises of the claimants’ section 140A claims based on non-disclosure of commission and profit share.
2. Sections 140A–140C of the Consumer Credit Act 1974 require a broad and holistic assessment of the whole relationship. The court must consider all relevant matters and, where unfairness is found, has a broad remedial discretion under section 140B directed to removing the causes and consequences of the unfairness. The assessment remains fact-sensitive; the FCA’s 50% approach is not a universal measure of unfairness or remedy.
3. DISP 1.4.1R imposes a mandatory obligation to investigate and assess complaints, and to offer redress when the respondent considers it appropriate. DISP Appendix 3 contains guidance and evidential provisions, not a free-standing obligation to pay a prescribed sum. No enforceable entitlement arises until an offer is made and accepted. A respondent may make the offer conditional upon a wider settlement, and a complainant remains free to reject it and pursue the Financial Ombudsman or litigation.
4. The claims were unliquidated. Before acceptance, neither claimant could sue for the offered sum and neither respondent was legally obliged to pay it. Payment of the offered sum therefore provided good consideration for the compromise and did not offend the rule in Foakes v Beer.
5. The wording of the correspondence, read as a whole, settled the section 140A claims concerning recurring non-disclosure of commission. In each case there was a genuine dispute, a bona fide compromise, transparent explanation of the calculation, and no unfair advantage. The court retained jurisdiction after settlement, but the circumstances justified being very slow to go behind the compromises. In Mrs Self’s case Santander discharged the burden of showing that the relationship was fair.

• Court of Appeal (Civil Division) — appeals by Christine Self and Jason Lee Harrop from County Court decisions were dismissed.
• County Court — HHJ Owen dismissed Mrs Self’s appeal from the Deputy District Judge’s dismissal of her claim; HHJ Khan upheld summary judgment for Skipton and dismissed Mr Harrop’s appeal.