Category: News

Article by Naomh Gibson

From Saturday 29 January 2022, the Highway Code is changing. All road users must be aware of these changes and abide by them moving forward.

For the uninitiated, the Highway Code is a set of rules, guidance and some mandatory rules for road users in the UK.

While its contents aren’t ‘law’, if you are proven to have broken that Code then this can be used against you in road traffic accident cases, or as Section 38(7) of the Road Traffic Act 1988 puts it [emphasis added]:-

“A failure on the part of a person to observe a provision of the Highway Code shall not of itself render that person liable to criminal proceedings of any kind but any such failure may in any proceedings (whether civil or criminal, and including proceedings for an offence under the Traffic Acts, the Public Passenger Vehicles Act 1981 or sections 18 to 23 of the Transport Act 1985) be relied upon by any party to the proceedings as tending to establish or negative any liability which is in question in those proceedings.”

So to be better prepared to consider liability in road traffic accident cases, we all need to be familiar with these updates.

The biggest (and most controversial change) to the Highway Code is the creation of a ‘Hierarchy of Road Users’. 

The idea is the road users who pose more of a threat than others must do more to reduce the danger or threat they pose, e.g. HGV drivers will need to be more considerate of cars and smaller vehicles => Car drivers will need to be more considerate of cyclists => cyclists will need to be more considerate of pedestrians.

Some practical examples of how this looks:-

• Drivers should not cut across cyclists going ahead when turning into or out of a junction or changing direction or lane
• Drivers at a junction should give way to pedestrians crossing or waiting to cross a road that they’re turning into (this means drivers must be more aware of the behaviour of pedestrians on footpaths)
• Horse riders should also give way to pedestrians on a zebra crossing
• Drivers should also not turn at a junction if doing so would cause a cyclist to swerve or stop
• Cyclists should give way to pedestrians that are using shared-use cycle tracks
• Cyclists must ride in the centre of the lane to make themselves more visible (note: NOT the middle of the road)
• Cyclists are not obliged to use cycle paths
• Drivers must leave at least 1.5 metres when overtaking cyclists at speeds of up to 30mph

While no doubt there were only good intentions when formulating the updated Highway Code, there may be some unintended negative consequences. For example, now that a car must give way to a pedestrian at a junction, this means a car approaching a 90 degree turn left on to a side road from a main road must considerably slow approaching this turn and taking the corner, or perhaps even stop. This will have the effect of a car on the main road slowing or stopping abruptly, which may see an increase in ‘rear end’ shunt’ type RTA cases.

It isn’t all bad news for drivers, however. Rule 1 (Pavements) for pedestrians now requires pedestrians to ‘always remain aware of your environment and avoid unnecessary distractions.’ This may prove useful to drivers who find themselves confronted with a pedestrian who has effectively stepped out in front of their car in a short distance or while pre-occupied with a mobile phone.

Whatever your views on the new Highway Code, it is sure to provide interesting challenges in road traffic cases where liability is disputed. If you or anyone you know is facing such a claim, we can help. Halcyon Chambers has a dedicated Credit Hire & Personal Injury team and Motoring Offences team who provide specialist advice and representation in all aspects of road traffic matters. Please contact our clerks on 0121 237 6035 or clerks@halcyonchambers.com for further information.

Article by Katie Wilkinson

Debtors under regulated credit agreements are able to bring a claim of unfair relationship pursuant to sections 140A to 140C of the Consumer Credit Act 1974 (CCA).  Section 140B(9) provides for a reverse burden of proof in such claims.

Section 140B(9) of the CCA provides that where “the debtor or a surety alleges that the relationship between the debtor and creditor is unfair to the debtor, then it is for the creditor to prove to the contrary”.  Its effect is to reverse the usual rule that “he who asserts must prove”.

The concept of reversing the burden of proof is not new to the CCA; the unfair relationship provisions replaced claims for “extortionate credit bargain”.  The test in those claims under section 171(7) provided that if “the debtor or any surety alleges that the credit bargain is extortionate it is for the creditor to prove the contrary”.

The question that arises from the language of section 140B(9) is whether both the creditor and debtor bear both a legal and factual burden, or whether a debtor must first establish their factual case before the creditor is tasked with a legal burden of establishing there is no consequent unfairness?

Arguably, if a creditor has to discharge both the factual and legal burden, it increases the volume and complexity of disclosure and evidence in the litigation process and may encourage spurious claims brought with the intention of making the litigation process costly and onerous on the creditor.

Upon the introduction of the unfair Relationship provisions, it was broadly assumed by most practitioners that the burden of disproving unfairness only switched to the creditor once the debtor had established their factual case. However, in Bevin v Datum Finance Ltd [2011] EWHC 3542 (Ch) it was stated:

“[55]… it is not, in my judgment, incumbent on Mr. Bevin to show a prima facie case as to unfairness or any case as to unfairness. As the section says, all he has to do is to make an allegation of unfairness. If he makes that allegation, the legal burden is on the creditor to prove that the arrangement was not unfair. The creditor in this case, Datum, has not adduced any evidence on unfairness whatsoever.

[56] I do not, therefore, accept that Mr. Bevin has a burden at this stage, in effect, to reverse that burden by putting a showing on first…”

In the years that followed, the general view of the Courts was that a debtor need only make a bare assertion of unfair relationship, leaving the burden in law and fact resting at the feet of the creditor.  More recently, however, in Promontoria (Henrico) Ltd v Samra [2019] EWHC 2327 (Ch), I was said:

“[26]… the onus is on the [creditor] to show, to the normal civil standard, that the relationship is not unfair because of any of the reasons set out in s 140A(1)(a)-(c). Whether it is so unfair is a matter for the court’s overall judgment having regard to all the relevant circumstances and matters, including matters relating (ie personal) to the creditor and debtor. This onus on the [creditor] does not however mean, in my judgment… that where [the debtor] makes allegations of fact on which he relies he does not have the burden of proving them to the normal civil standard. The onus placed on the creditor is as to the relationship between it and the debtor, and does not have the effect that factual allegations made by [the debtor] must be accepted unless they can be positively disproved by contrary evidence.”

Arguably, the decision in Samra conflicts with Bevin and the County Court will have to decide the approach to take when dealing with unfair relationship claims. 

Article by: Katie Wilkinson

The Court of Appeal’s decision in CFL Finance Ltd v Gertner [2021] EWCA Civ 228, handed down in February 2021 decided the issue of whether Tomlin Orders are theoretically capable of extending ‘credit’ within the meaning of the Consumer Credit Act 1974, so that the settlement agreement is caught by the legislation.  Confirming the decision of Marcus Smith J, the Court of Appeal agreed that Tomlin Orders were theoretically capable of extending “credit”.

The Facts

The Defendant had guaranteed a loan provided by the Claimant to a company named Laser Trust Ltd (‘Laser Trust’).  Laser trust defaulted on the loan and the Claimant brought a claim against the Defendant on the basis of the terms of guarantee.  The claim was defended on various bases, but ultimately settled by way of Tomlin Order.

The Tomlin Order provided for the outstanding debt due under the guarantee to be repaid by by way of instalments, with all capital and interest becoming payable on default.  The Defendant repaid £1.5 million (out of an agreed £1.7 million) pursuant to the terms of the Tomlin Order, but then defaulted.  As a result, the entirety of the remaining capital and interest became due.

The Claimant issued a bankruptcy petition against the Defendant and at a subsequent hearing of the petition he argued that the Tomlin Order was unenforceable as a regulated credit agreement pursuant to the provisions of the CCA.  The argument failed and a bankruptcy order was made.

On appeal ([2020] EWHC 1241 (Ch)), Marcus Smith J set aside the bankruptcy order on the ground that the proceedings should have been stayed to allow Mr Gertner’s other creditors to consider a voluntary arrangement.  In relation to the CCA point it was held that a Tomlin Order was theoretically an agreement capable of falling within the scope of the CCA, but that the Defendant’s agreement did not.

An appeal brought by CFL was against Marcus Smith J’s decision to set aside the bankruptcy order.  The Defendant cross-appealed on the CCA point.  CFL’s primary appeal was subsequently dismissed upon its failure to provide security for costs.  The only effective appeal was therefore the CCA point brought by the Defendant.

The Court of Appeal was faced with two questions: 

1.     DOES AN AGREEMENT WITHIN A TOMLIN ORDER CONSTITUTE AN ‘AGREEMENT’ UNDER THE CCA?

The Court of Appeal decided that an agreement within a Tomlin Order could constitute a regulated credit agreement under the CCA.

2.     DID THE SETTLEMENT AGREEMENT PROVIDE THE DEFENDANT WITH ‘CREDIT’?

The Court of Appeal set out that:

• Where a creditor allowed a debtor more time to pay, for no consideration, the CCA would not apply;
• An agreement which provided for the payment of additional interest, costs or the debtor giving up their defence would constitute consideration provided that the debtor genuinely believed that the defence had at least a fair chance of success;
• If a debtor genuinely disputed a claim on substantial grounds the CCA would not apply as the creditor would not be “deferring a debt”, but instead would be entering into a compromise with the debtor in relation to a claim which may or may not have succeeded; 
• If a debtor does not dispute that a debt is owed, and the two parties enter into an agreement to defer payment of the debt, possibly by way of instalment payments, then if consideration has been given by the debtor, this will amount to the provision of ‘credit’ and would be a ‘consumer credit agreement’ under the CCA.

There has to exist a ‘debt’ in order for credit to be given.  However, in circumstances where a debtor disputes that a debt is payable, but the grounds of dispute are clearly weak in law or in fact, creditors must take extra care to determine whether they are ‘deferring a debt’ by way of the Tomlin Order.  If the Tomlin Order is found to be caught by the CCA and associated regulations, the agreement will be unenforceable as the creditor will not have (or is unlikely to have) the appropriate regulatory authorisations. 

Halcyon Chambers are delighted to announce that Katie Wilkinson has been appointed a Deputy District Judge by the Lord Chief Justice, and will sit on the Midland Circuit.

Katie was called to the Bar in 2003 (Lincoln’s Inn) and will continue to practice from Halcyon Chambers in civil, chancery and commercial law.

We would like to wish her every success in her new role.

We are delighted to announce that Edward Pearce joins Chambers from Tuesday 4th May as part of our Family Team.

Edward is very well known across the Midland Circuit and specialises in Family Law with particular interests in Public Law and Private Law proceedings.

Suzanne Hodgkiss, Head of the Family Team, welcomes Edward and said “I am delighted that an advocate of Edward’s quality has chosen to join Halcyon Chambers Family Team and he will be an excellent addition to our team”

If you wish to instruct Edward, please contact our Clerking team.

Chambers wishes to congratulate Naomh Gibson on successful completion of the Second Six of her pupillage. Naomh undertakes work in all practice areas and all enquiries should be addressed to clerks@halcyonchambers.com

Article by Rose Oliver

Summary: Comment on the 114th amendments to the Civil Procedure Rules, in force from 6th April 2020

In the Government’s 2017 consultation on credit hire claims, the Civil Procedure Rule Committee opened up the floor to all practitioners in the area. The result was the amended Part 16 of the Civil Procedure Rules, which came into force on 6th April 2020. There are now further mandatory requirements for all credit hire claims proceeding in the County Court, and further reaching amendments to the Rules as a whole.

Statements of Case

Practice Direction 16, paragraphs 6.3 and 6.4 now state:

6.3 Where the claim includes the cost of hire of a replacement motor vehicle following a road traffic accident, the claimant must state in the particulars of claim;

6.4 In paragraph 6.3—

A well pleaded statement of case will set out the above as a matter of course. Attention is drawn to paragraph 6.4(2); it is insufficient to state, for example, that the Claimant needed a vehicle for the period of hire claimed. The burden of proof dictates, and this practice direction underlines, that the Claimant must set out the facts of their case which lead to the conclusion that the Claimant did in fact need that vehicle over the entire period of hire.

Witness Evidence

The particulars of claim are not a substitute for a thorough witness statement putting those facts into evidence. Care should be taken that thorough instructions are taken from Claimants, as was seen in Irving v Morgan Sindall [2018] EWHC 1147 (QB), wherein the Claimant’s oral evidence differed on the crucial point. Despite Miss Irving’s sworn witness statement that she was obliged to pay the credit hire charges, she gave oral evidence that she was not personally liable.

Amendments to Practice Direction 32 on Evidence now impose further standard requirements for witness evidence. Witness statements must also now include the method by which they were taken, and must be in the witness’ own words. Practice Direction 23 now requires that the witness statement must be in the witness’ “own language”, which presumably means their first language, and must contain the date of translation of any translated copies.

Statements of Truth

From 24th February 2020, claims presented through the online Money Claims System required the inclusion of a new form of statement of truth. From 6th April 2020, amendments to Parts 22 and 33 of the Civil Procedure Rules now require all statements of case and witness statements to include the new form:-

‘[I believe][the (claimant or as may be) believes] that the facts stated in this [name document being verified] are true. I understand that proceedings for contempt of court may be brought against anyone who makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth.’

Standard Directions

The consultation proposals also included a requirement for standard directions in credit hire claims on all tracks. Concerns had been raised that small claims track directions in particular were not conducive to settlement, with disclosure due simultaneously only 14 days in advance of the final hearing.

Whilst the proposed standard directions did not make the final cut of recommendations, they remain a good point of reference and a useful indicator of judicial attitudes to evidence in these types of claims. The Rules Committee proposed specialist directions in respect of evidence of impecuniosity, need and the basic hire rate, in the form set out below:

“a) The Claimant will provide a witness statement addressing, and if relied upon, evidence in support of:

(b) If impecuniosity is alleged by the claimant and not admitted by the Defendant, the Claimant’s disclosure will include:

c) Failure to comply with the directions above will result in the Claimant being debarred from asserting impecuniosity at the final hearing save with permission of the Trial Judge”

d) The parties are to liaise and use reasonable endeavours to agree the basic hire rate no later than 4pm on [28 days from date of order].

e) If the parties fail to agree rates subject to liability and/or other issues pursuant to paragraph (d)above, each party may instruct a single witness to provide evidence of basic hire rates available within the Claimant’s geographical location, from a mainstream (or, if none is available, a local reputable) supplier. The Defendant’s evidence to be served by 4pm on [14 days after paragraph (d)above]and the Claimant’s evidence in reply if so advised to be served by 4pm on [28 days after paragraph (d)above].

Article by Naomh Gibson

Business owners and merchants, whether of small, medium or large entities, will be aware of multilateral interchange fees (“MIF”). For the uninitiated, this is when the payment card industry requires a fee for the acceptance of card-based transactions. As per 2015 EU regulations, this could be as much as 0.2% of the transaction value for consumer debit card payments, including prepaid payment cards, or 0.3% of the transaction value for consumer credit card payments (not including American Express). 

When a cardholder pays in a store by card, their bank deducts the transaction value from their account and transfers it to the merchant’s bank minus the MIF. The merchant’s bank then transfers to the merchant the value of the transaction minus a merchant service charge (“MSC”) negotiated between the merchant and its bank. Merchants’ banks pass on all of the MIF to merchants through the MSC, with negotiation between merchants and their banks in respect of the MSC being limited to the amount charged by the bank in excess of the MIF. Merchants are therefore unable to negotiate with the banks on the level of the MIF, which typically accounts for some 90% of the MSC.

Until recently, it looked as though the only way to truly avoid MIFs was to operate a cash-only business, which is undesirable for many in our increasingly contactless world. However, on 17 June 2020, the Supreme Court unanimously upheld a ruling that MIFs charged by Visa and Mastercard unlawfully restricted competition. 

In Sainsbury’s Supermarkets Ltd v Visa Europe Services LLC and others [2020] UKSC 24 (available here), it was confirmed that as per Article 101(1) TFEU, Visa and Mastercard had MIF agreements which adversely affect trade between member states, and which had the effect of restricting competition. The card companies’ main defence, namely that they had an exemption under Article 101(3) TFEU as their restrictive agreements still generated objective economic benefits that outweighed the negative effects of the restriction of competition, was roundly rejected. 

Confirming the previous Court of Appeal decision, it was held that the card companies failed to satisfy the Court to the necessary standard that consumers or merchants were receiving a fair share of the benefits generated by the MIFs. The judgment also helpfully set out requirements for any possible exemption. As at para. 116:

As such, Visa and Mastercard were not able to argue simply that an issuing bank which receives a payment on each card transaction undertaken by its customers will probably invest more to encourage its customers to engage in a greater number of such card transactions than it would do if it did not receive any such payments.

Additionally, the judgment sets out the legal test for establishing whether an unlawful overcharge is passed on down a distribution chain, which may give rise to further claims. In this case, one of the claims raised by multiple retailers was that in so far as the unlawful overcharges have been passed on in their selling prices to their customers, they have suffered a loss of profit on the sales of the goods concerned through a reduced volume of sales. The Supreme Court agreed that the claimants were entitled to plead as the prima facie measure of their loss the pecuniary loss measured by the overcharge in the MSC. The claimants did not have to plead and prove that the breach of contract adversely affected their overall profitability.

As per paras. 182-189 of the judgment, there can be no presumption that unlawful charges have been passed on. Whether there has been a pass-on is a question of fact to be established on evidence adduced before the national court, based on whether an overcharge resulting from a breach of competition law has caused the claimant to suffer loss, or whether all or part of the overcharge has been passed on by the claimant to its customers or otherwise mitigated. However, where there was evidence that the claimants mitigated the overcharge by methods such as reducing its costs by negotiation with its many suppliers, and/or passing on the costs by increasing the prices which it charges its customers, the compensatory principle mandates the court to take account of their effect when assessing loss.

This is a landmark decision which provides guidance for hundreds of other business claimants also concerned about MIFs and competition restriction. If you believe your business may be affected by this decision or would like advice on managing risk during the COVID-19 pandemic, Halcyon Chambers has a dedicated Commercial and Chancery team which continues to take instructions, including for remote hearings. Please contact our clerks on 0121 237 6035 or clerks@halcyonchambers.com for further information. Naomh is a first six pupil accepting instructions from July 2020 onwards.