evidence not permitted
There have been a number of
consumer credit-related cases that have gone against debtors in
recent months. The latest one relates to a ‘punt’ by a debtor to
obtain evidence from his lender to ascertain whether he might be
able to argue that his credit agreement was unenforceable.
The court confirmed it will not
assist would-be claimants to obtain evidence to try to substantiate
wholly speculative claims. The decision will be of assistance to
motor finance companies facing similar issues.
In Kneale vs Barclays Bank Plc
(t/a Barclaycard), Kneale had an outstanding balance on his
account which the bank was pursuing. He requested a copy of the
executed agreement he had made with the bank pursuant to section 78
of the Consumer Credit Act 1974.
The bank provided copies of the pro
forma documents as required, but not a copy of the signed agreement
Kneale then sought pre-action
disclosure of the executed agreement to establish whether or not it
was enforceable. The basis of his application was he had seen
advertisements from claims handling companies and was aware many
similar agreements entered into pre-April 2007 had been found to be
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He wanted a copy of the executed
agreement to determine whether it might also be unenforceable. An
order for pre-action disclosure was made, but the bank successfully
The court found that for an
application for pre-action disclosure to succeed, the parties had
to be likely to be parties to subsequent proceedings, should they
be commenced. That is, there must be a prima facie case
which is more than a merely speculative ‘punt’. Further, the
pre-action disclosure sought had to be desirable to dispose fairly
of the proceedings, assist resolution without proceedings or save
The court held that Kneale had not
put forward any evidence nor set out any positive case concerning
the enforceability (or otherwise) of his agreement. There was no
suggestion the pro forma agreement the bank had supplied
was not in the same form as Kneale had originally signed, nor that
he had not signed it.
The court considered it was
doubtful it was necessary for Kneale to have a copy of the signed
agreement to determine whether he had a claim. The material Kneale
had been provided with by the bank already was sufficient for him
to have argued his case, had he got one.
The court considered the claim was
without merit, wholly speculative, it could not be said proceedings
were likely to ensue and, in the circumstances, it was not
desirable that an order for disclosure be made.
This case will be useful for any
motor finance company facing speculative claims. An applicant for
pre-action disclosure must show that its potential claim is more
than merely speculative for an application to succeed.
The courts will not grant such an
application where the applicant is simply on a ‘fishing
expedition’, or, as in this case, attempting to obtain evidence to
enable it to jump on the bandwagon of other claims being brought in
the hope that the debt might be written off.
The author is a partner at
Wragge & Co LLP’s Finance, Insolvency, Recoveries and Sales