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UK Supreme Court hears appeal in Consumer Credit claim

The UK Supreme Court has heard the Claimants' appeal from the Court of Appeal's judgment in Smith & Burrell v Royal Bank of Scotland Plc [2021] EWCA Civ 1832.

The Court of Appeal's judgment currently stands as authority for the possibility of 'compartmentalisation' of a relationship between a creditor and a debtor. According to Birss LJ's judgment, relationships 'can self-evidently change over time' (at [65]) and therefore may become fair or unfair at a point later in time, having previously been the opposite. Following the reasoning in Smith at [64]-[69], when it comes to assessing the fairness of a relationship, a Court may conclude that a relationship is no longer unfair if the source or the consequences of previous unfairness have ceased.

The Supreme Court is being asked whether a relationship can be assessed as unfair at a given point in time, rather than invariably at the point when a relationship has concluded.

After the the Supreme Court hearing of Smith, there will be two appeals awaiting judgment which relate to claims of unfair relationships between creditors and debtors under the Consumer Credit Act 1974. The other pending judgment is Canada Square Operations Ltd v Potter which was heard in June 2022. Since it was heard first, it is anticipated that the judgment in Potter shall emerge before that in Smith.

Credit for the image used in this article goes to the UK Supreme Court

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