THE HIGH COURT CASE

In July 2003, a High Court Test Case was heard by the Lords of Appeal in the House of Lords. This case has very wide ranging implications for both Lenders and Borrowers whose Solicitors claim Unenforceability of their Clients Credit Agreements due to breaches of the Consumer Credit Act 1974 

A brief summary of the case is that Penelope Wilson took out a £5,000 Loan in January 1999. Mrs Wilson failed to repay the money and the Lender issued Court proceedings against her in Kingston upon Thames County Court to recover the outstanding debt. In Court, Mrs Wilson represented herself arguing that the Loan was Unenforceable and she did not have to repay it, because the content of the Agreement did not comply with the Consumer Credit Act 1974

After much Legal argument, Mrs Wilsons case was eventually referred to the Lords of Appeal in the House of Lords. This Court represents the highest Court of Appeal for Civil Law cases in the United Kingdom and its rulings are often seen as setting Legal Precedents. The case was seen to have such far reaching affects for all Lenders within the Country, that the Lender was represented by the Secretary of State for Trade and Industry (Appelant) and the case became Wilson and others vs Secretary of State for Trade and Industry

On the 10th July 2003, the Law Lords gave their verdict. They ruled that the Loan Agreement was Unenforceable, Mrs Wilson did not have to repay the outstanding debt and that the Lender must refund to Mrs Wilson the Loan repayments she had previously paid to the Lender totaling £6,900. Lord Nicholls concluded that: " ...Undoubtedly, as illustrated by the facts of the present case, section 127 (3) may be drastic, even harsh, in its adverse consequences for a lender. He loses all his rights under the agreement, including his rights to any security which has been lodged. Conversely, the borrower acquires what can only be described as a windfall."

Read the Law Lords Judgment in the House of Lords, Wilson and others vs Secretary of State for Trade and Industry, by CLICKING HERE