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The "worthwhile claim" test in Consumer Credit Claims

The 'worthwhile claim' test in Consumer Credit Claims

In the first part of this write-up, the judgment in Gemalto was considered. Green LJ summarised the ratio at paragraph [74] regarding cases involving deliberate concealment under s32(1) Limitation Act 1980. Time begins to run from the point in time when the claimant knows, or could with reasonable diligence know, of the concealed facts 'with sufficient confidence to justify embarking on the preliminaries to the issue of a writ, such as submitting a claim to the proposed defendant, taking advice and collecting evidence'.

In setting the relevant degree of conviction, the Court of Appeal confirmed that a reasonable belief in the relevant facts was the threshold, with [74] continuing:

" the context of the application of these tests, the [Supreme] Court confirmed that for time to run all that was required was a “reasonable belief” in the relevant facts, not the truth of them, that being something which is established at trial, not at earlier stages of litigation."


Claims based on allegedly unfair relationships within the meaning of the Consumer Credit Act 1974 s140A and s140B are currently litigated at high volumes in the County Court across the jurisdiction.

How much does the claimant need to have discovered in order to have a worthwhile claim?

Paragraph [49] of the Gemalto judgment is authority that the claimant need not have discovered every essential element of the claim that has been concealed.

Paragraph [50] contains this passage: "One can embark on the preliminaries to the issue of a writ once one knows that there may have been a cartel without knowing chapter and verse about the details. That is what one either finds out when making investigations or will only find out upon disclosure within the eventual proceedings."

At [53], Vos MR stated that a claimant, “…would not, however, know that it had a worthwhile claim if a claim pleaded on the basis of the details it knew would be struck out”.

Time starts to run without the claimant knowing ‘chapter and verse’ about the details. A claim is worthwhile if it is not susceptible to being successfully struck out. Applied to an ‘unfair relationship’ claim, if the claim is founded on an undisclosed high level of commission, a claimant need not know the exact percentage of commission before having a worthwhile claim. It is sufficient for a claimant to know of or discover (or that they could with reasonable diligence have known or discovered) the fact of the concealment of commission. This is because the claimant can plead a claim asserting that the commission level exceeds a tipping point past which the relationship is unfair. That claim is ‘worthwhile’ and would not be defeated by an application to strike it out. Time therefore begins to run when the claimant discovers or could with reasonable diligence have discovered the concealment of commission.

The FII test does not mean that the claimant must have everything it needs to succeed in its claim on the day that the limitation period begins to run – Gemalto at [60].

In order to succeed in reliance upon s32(1), the burden of proof is on a claimant to demonstrate that they could not with reasonable diligence have discovered the concealment of commission sooner than 6 years before issuing their claim – FII at [213(16)].


In Gemalto, Green LJ agreed with Vos MR in the result, and provided analysis as to why his initial concerns ultimately did not dissuade him from agreeing with the lead judgment. With regard to whether the FII test might prejudice 'unwary consumers', Green LJ stated at [89], 'I do not think that the Courts would permit this to happen', pointing out that the application of the test was fact and context sensitive, and would take into account the nature of the claimant and its resources, including access to legal advice.

In the context of an ‘unfair relationship’ claim, it is likely that a Court would be slower to conclude, in applying the FII test, that a consumer with fewer resources than a corporate claimant had sufficient confidence to justify embarking on preliminary exploratory work. Therefore time may not begin to run as soon for a consumer claimant as it might for a corporate claimant. This is partially because a corporate claimant could more readily obtain advice. The application of the test will be dependent on the nature of the claimant themselves; their degree of sophistication or vulnerability will play a large role in ascertaining what to them would constitute a reasonable belief as well as ‘sufficient confidence’ to justify undertaking preliminary action before issuing a claim.

In practice therefore, arguments as to the evidence regarding the nature of the particular consumer claimant who has brought the claim have a pertinent role to play in the application of the test under s32.


In Gemalto, the Court of Appeal applied weight to the involvement of the relevant regulator, their investigation into the cartel and the ensuing Statement of Objections issued by the European Commission in 2013. At [46] Vos MR expressed that ‘pure speculation’ as to a concealed event would not ground a worthwhile claim, but a claim would be worthwhile if, “an authoritative regulator had thought it sufficiently serious, having investigated all the evidence available, to lay charges or issue a statement of objections.”

It is plausible that for certain consumer claimants, the Competition Commission’s Market investigation into payment protection insurance from 29 January 2009 sufficed for time to start running. There will be a class of consumer claimants who would have had sufficient confidence to justify embarking on the preliminaries to the issue of a writ from that date onwards.

It remains an open question as to what relevance the industry regulator, the Financial Conduct Authority (or its predecessor, the Financial Services Authority) might have for a particular consumer claimant. The regulator having published a series of publications regarding the PPI industry over several years, an argument could be mounted that time starts to run for a claimant following one of their publications. The relevance of the UK Supreme Court’s November 2014 decision in Plevin remains to be seen. The appropriate question for the Court in a particular case might be whether the claimant could have discovered that they had a worthwhile claim in the aftermath of that judgment. If, for instance, the claimant kept abreast of consumer affairs or personal finance news, it might be said that they could have known or discovered that they had a worthwhile claim.


Since the Court of Appeal has held that the FII test is the appropriate test under s32(1)(b), with the ‘statement of claim’ test being a gloss on the FII test, time will begin to run from the point where the claimant objectively knew or discovered that they had a worthwhile claim, that is, one not vulnerable to being struck out. The Court has confirmed that the requirement for discovery does not amount to knowing 'chapter and verse' about the claim, but instead knowing with sufficient confidence to justify embarking on the preliminaries to issuing a claim. A reasonable belief in the facts is the relevant threshold; the question of whether a claim is worthwhile is not "a complex balance of the chance of success" and time does not only begin running once the claimant can demonstrate that the claim is more likely than not to succeed.

In sum, the universal application of the FII test to s32 will, in an increasing number of cases, lead to the conclusion that time begins to run at an earlier point, than if the test required a larger amount of knowledge, or a larger degree of conviction as to the relevant facts.

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