Judge overturns decision in landmark claims management case
Published ¤ 25/11/2009
Judges at the Court of Appeal have overturned a decision by a county court judge to write off a couple's £40,000 debt, in what has been described as an important case which will affect many other claims.
The Cheshire-based claimants, Michael and Suzanne Walker, took out a £17,500 secured loan with Southern Pacific Personal Loans in 2005, but later fell into arrears, with the debt eventually reaching £40,000.
Facing repossession, they sought to get the £40,000 debt written off on the grounds that the credit agreement was unenforceable.
In April of this year, county court Judge Halbert ruled the credit agreement unenforceable and ordered the lender to drop the charge against the Walkers' property.
However, Lord Justice Mummery at the Court of Appeal said that the ruling had brought on a "spate" of consumer credit litigation, with Southern Pacific Personal Loans facing a number of similar claims from its other borrowers.
The decision was overturned and what would have been a windfall for the Walker couple is now looking more like a further £100,000 of debt, as they're hit with legal costs from the loan company as well as the threat of losing their home again.
Judges maintained that consumer credit law is complicated and that the county court Judge Halbert had "got it wrong." They added that the result "will affect other cases in the current spate of consumer credit litigation and potentially many other credit agreements".
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