Supreme Court Grants Permission to Appeal on Unfair Relationship Provisions in Harrison & Harrison v. Black Horse Limited

    March 2012

    On 21 February 2012 the Supreme Court of the United Kingdom gave Mr and Mrs Harrison permission to appeal the Court of Appeal’s emphatic decision in Harrison & Harrison v. Black Horse Limited [2011] EWCA Civ 1128, which considered whether the taking of an undisclosed commission (when there was no regulatory obligation to disclose the existence or amount of the commission) created an “unfair relationship” under Section 140A of the Consumer Credit Act (CCA) 1974. 

    The unfair relationships provision came into force on 6 April 2007 as a result of a change in the law made by the Consumer Credit Act 2006. These changes replaced the “extortionate credit bargain” test which had previously applied under the CCA 1974.

    Published on 12 March 2012, this Squire Sanders newsletter aims to clarify for lender and broker clients the unfair relationships provision in the CCA 1974.  The provision applies to all lending to individuals, sole traders or partnerships of two or three partners whether or not it is regulated by the CCA 1974 (subject to some exceptions).