Deemed agency and ‘unfair relationship’
By Greg Standing
The Court of Appeal has once again determined the issues of ‘unfair relationship’ and agency in the borrowers’ favour. In Scotland and Reast v British Credit Trust Ltd, the Court of Appeal held that a broad approach as to the meaning of acting ‘on behalf of’ should be adopted and that even if the ‘Insurance: Conduct of Business’ rules do not apply to the lender, those rules still apply a benchmark against which a lender’s (or its agent’s) behaviour should be judged in determining whether an unfair relationship exists.
In March 2005, the claimants bought double glazing from Bowater Windows trading as Zenith Staybrite following a visit to their home by its salesmen (S). The claimants required a loan (which Zenith was to arrange) to enable them to make the purchase. S told the claimants they had to purchase PPI in order to secure the loan. Zenith, through a broker, subsequently submitted the application for the loan to the lender electronically. At no time was the lender involved in any negotiations with the claimants.
The lender did not, in fact, require PPI to be taken out as a condition of the loan and would have agreed the advance without it. The loan to purchase the double glazing was for £7,430 and the PPI premium £1,133.08. The PPI policy was duly issued by the insurers. The lender earned commission on the premium and interest on the loan that related to it…
Click on the link below to read the rest of the Wragge Lawrence Graham & Co briefing.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from Wragge Lawrence Graham & Co
News from The Lawyer
Briefings from Wragge Lawrence Graham & Co
The Treasury has issued a consultation document that clearly signals its recognition of the value to the UK economy of the private funds sector (including private equity and real estate funds).
Without prejudice communications with a regulator; collateral benefit and negligence; and more.