Ruling will tighten the screw on claims management firms

09/10/2009

A ruling at the Royal Courts of Justice in a consumer credit case involving the Royal Bank of Scotland and a customer will have serious repercussions for claims management companies'>claims management companies.

In the Commercial Court, Mr Justice Faux found in favour of RBS in its case against Phillip McGuffick, who claimed that a loan of £17,000 was irredeemably unenforceable under the Consumer Credit Act.

The court rejected this argument, saying that those seeking to prove their credit agreements are unenforceable under the law are still responsible for any money still owed.

According to law firm Eversheds, the case has clearly defined the meaning of enforcement with regards to the Consumer Credit Act and will be a big boost to lenders facing challenges to the enforceability of agreements.

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