High Court confirms 5,800 motor finance claimants can use omnibus claim forms and do not need to issue separate claim forms

The High Court has held that 5,800 claims relating to discretionary commission arrangements in motor finance broker cases can be brought using omnibus claim forms, overturning a district judge's decision which would have required each claimant to issue a separate claim form or have its claim struck out: Angel v Black Horse Ltd [2025] EWHC 490 (KB).

These claims relate to whether and in what circumstances motor finance brokers had a discretion to vary the commission they received and any consequential additional interest charged by lenders to customers, and whether (and to what extent) such arrangements were necessarily unfair pursuant to s.140A of the Consumer Credit Act 1974.  Such claims form part of a broader context and backdrop of cases progressing through the courts concerning alleged secret commissions charged by brokers for financial products. The Supreme Court is currently hearing an appeal against Johnson v FirstRand Bank Ltd [2024] EWCA Civ 1282 (considered here) relating to car finance, which is likely to have significant implications for any business model involving the payment of commissions to third parties.

The present decision shows how the courts will approach the question of whether s.140A claims can be brought using a single or "omnibus" claim form, and managed together, or whether they will have to proceed separately.

While each case will turn on its own facts and circumstances, the decision suggests that the threshold for allowing omnibus claims is lower than for a Group Litigation Order (GLO), with the court having a very broad discretion to determine whether claims can conveniently be disposed of in the same proceedings. Applying Morris v Williams & Co Solicitors [2024] EWCA Civ 376 (considered in our previous blog post here), there is no separate, exclusionary test of whether a determination of common issues will be binding on the other claims, or of real significance to them, or constitute real progress toward their determination.

The decision is of particular interest in finding that claims alleging an unfair relationship under s.140A were suitable for omnibus disposal, despite the fact that in determining the question of fairness the court must have regard to all relevant circumstances. The court was satisfied that omnibus case management would assist in the choice of lead cases to determine both broad and specific common issues, with decisions in those cases being at least persuasive in the other cases and facilitating settlements of them. Overall, it would be more convenient and better serve the overriding objective than requiring separate claims.  

Background

CPR 7.3 states that a claimant may use a single claim to start all claims which can be conveniently disposed of in the same proceedings. CPR 19.1 states that any number of claimants or defendants may be joined as parties to a claim.

In the present case, over 5,800 claimants brought claims in the Birmingham County Court against eight motor finance companies under s.140A, alleging that they had arranged for undisclosed and unfair commissions to be paid to brokers or dealers. The claims were issued using a total of eight claim forms, grouped by defendant, and eight sets of generic particulars of claim were served.

The generic particulars set out various common allegations, including (in broad summary) that: each claimant had entered a consumer credit agreement to buy a car which was subject to s.140A; each defendant had made a written brokerage agreement with a dealer or credit broker which provided for the latter to receive discretionary commission (ie commission which varied according to the interest rate set by the broker/dealer); and the broker/dealer had recommended the defendant's loan to the claimant without disclosing the commission. The generic particulars did not contain any specifics of each claimant's credit contract, personal circumstances or sophistication concerning finance, any brokerage agreement, or any sums claimed.

The defendants argued that the claims should be severed and issued separately. This issue was addressed at a case management conference before the defendants had served any defences.

Applying guidance given by the Divisional Court in Abbott v Ministry of Defence [2023] EWHC 4002, HHJ Worster found that the convenience test under CPR 7.3 was not met, as the claims did not raise common issues of sufficient significance that their determination would constitute real progress toward the determination of each claim. He ordered that each claimant must issue a separate claim form or the claims would be struck out.

The claimants appealed, arguing that the claims could and should conveniently be disposed of in the same proceedings under the eight omnibus claim forms and the district judge was wrong to order severance. The defendants sought to uphold the judgment, emphasising the fact-specific nature of the court's determination of the issue of fairness under s.140A (as established by the Supreme Court in Plevin v Paragon Personal Finance Ltd [2014] UKSC 61).

Decision

The High Court (Ritchie J in the Birmingham District Registry) overturned the order requiring severance.

The judge noted that Morris provides the current governing guidance on how to apply CPR 7.3 and 19.1. In that case, the Court of Appeal held that the proper approach is to apply the normal meaning of the words in these rules. There is no exclusionary rule based on the tests put forward in Abbott, ie: the "real progress" test (whether there are likely to be common issues of sufficient significance that their determination would constitute real progress toward the final determination of each claim); the "real significance" test (whether there is sufficient commonality for the decisions made to be of real significance for all the rest); or the "must bind" test (whether a determination of common issues would bind all parties). Such matters are relevant in determining whether the claims can conveniently be disposed of in the same proceedings, but are not exclusionary.

Ritchie J noted that there are various procedural methods of pursuing multiple similar claims against the same defendant:

• Route one is to use separate claim forms, though the claims may then be consolidated or case managed together, or made subject to a GLO, or conjoined or heard together or appeal.
• Route two is to issue the claims together using an omnibus claim form and then manage them together. This route is flexible and does not depend on the GLO criteria.

Whichever route is taken, the court seeks to fulfil the overriding objective of dealing with the cases justly and at proportionate cost. Case management under either route may lead to similar end results, with preliminary issues or lead claims identified and tried so as to determine common issues of law or fact in a proportionate way. The results may bind the parties in the following claims or may be merely persuasive, and the courts will seek to facilitate settlement of valid cases where possible.

In the present case, in finding that the claimants had to use "route one", the district judge had applied guidance from Abbott, which was binding on him but which the Court of Appeal had subsequently ruled was not the right test. His decision therefore could not stand.

That was sufficient to dispose of the appeal, but the judge went on to consider the other specific grounds of appeal, including that the district judge had erred in underestimating the significance and/or binding effect of any decisions on broad common issues.

Ritchie J disagreed with the district judge's conclusion as to the insignificance or limited effect that decisions on common issues in lead cases would likely have on the following cases. That appeared to be based on an assumption that lead cases would be used only to determine the broad common issues, rather than the lead cases being tried in full. The judge described that as a "very narrow" assumption, which ignored the flexible way an omnibus claim could be handled.

The more likely situation was that sample cases would be chosen after there had been early disclosure and specific pleading covering all matters relevant to s.140A, and the common issues had been crafted with greater precision. Decisions in the lead cases would not fully determine whether there was an unfair relationship in the following claims, as unfairness could only be determined having regard to all relevant factors (as per Plevin), save in a very clear case. However, those decisions could be very persuasive. Further, if the case management judge so ordered, decisions on specific common issues could bind a specific cohort of following cases where relevant facts were the same.

As the judge put it:

"In my judgment, there is more to significance than mere bindingness. It involves also persuasiveness and practicality. In any event significance is not the test, convenient disposal is the test."

Ritchie J considered that he should exercise the discretion under CPR 7.3 and 19.1 afresh, and held that it was appropriate to order case management under the omnibus claim forms rather than requiring separate claim forms, as that was the more convenient route to dispose of the claims.

The factors in favour of omnibus disposal included that: each claim form named a single defendant; the claims relate to the same or similar matters and involve the same cause of action; there are broad common issues and are likely to be many specific common issues; and omnibus case management will assist in the choice of lead cases to determine these common issues, with decisions in those cases being at least persuasive and facilitating settlements of the following cases.

Omnibus disposal would also better meet the overriding objective, including because it would be likely to facilitate access to justice for claimants, provide for more focused and timely disclosure, require fewer judge hours overall, and avoid the risk of conflicting decisions.

We wait to see whether the defendants will look to appeal this decision.