Greg Standing looks at entitlement to enter judgment in default

The Civil Procedure Rules (CPR) have a specific procedure to be followed where a claim is made under certain parts of the Consumer Credit Act 1974 (CCA) (including one of unfair relationship (s140B(2)(a) CCA). The purpose of the procedure under the CPR Consumer Credit Act Practice Direction 7B (PD7B) is to provide a fixed date for a hearing where no extensive pre-trial procedure is required.

A recent issue for determination was whether, if only one of a number of allegations in a payment protection insurance (PPI) claim was of an unfair relationship, the entire claim had to be dealt with under PD7B, unless the court ordered otherwise?

In Chamberlain v Northern Rock (Asset Management) PLC, the claimant alleged he had been mis-sold PPI by the defendant. He alleged the policy had been mis-stated as compulsory, had been negligently sold to him, that the correct amount of credit and/or total charge for credit had not been stated and the relationship between the parties was unfair within the meaning of s140A CCA.

The claimant sought to have judgment in default entered against the defendant as it had not acknowledged service of the proceedings or filed a defence. The defendant applied to have the judgment set aside on the basis that the proceedings, due to the claim of unfair relationship, fell to be dealt with by PD7B.

PD7B provides that as there is a fixed hearing, the defendant is not required to serve an acknowledgment or file a defence before the hearing although it may choose to do so. Indeed it should choose to do so if it does intend to defend the proceedings. The defendant argued that failure to do either could not therefore be a ground for default judgment to be entered. PD7B also precludes the default judgment procedure.

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The claimant argued that where there is a claim based on a number of separate bases, including one of unfair relationship, PD7B does not apply.

The normal Part 7 procedure applies and the claimant was therefore entitled to enter judgment in default. The claimant alleged that where the claim relates to cases such as mis-selling of PPI, PD7B does not apply as a more complex procedure is required with directions for disclosure, inspection, witness statements etc being given. It is not appropriate for a hearing to be given at an early stage as per PD7B.

The County Court judge agreed with the defendant. The court held that if one element of the claim falls within PD7B, the fact that there are other claims included that do not fall within the ambit of PD7B does not mean that the claim is taken out of PD7B. The defendant was not obliged to serve an acknowledgement or defence. Judgment would be set aside.


The claimant could have applied for a default judgment under the CPR (CPR12.4(1)-(3)) but that would have required the unfair relationship allegations to have been specifically abandoned, which the claimant had not done. Having elected to include, and maintain, the allegation of unfair relationship, the claimant had to comply with the relevant procedure.

Greg Standing is a partner in Wragge & Co’s motor finance litigation team