The UK High Court has struck out an appeal in relation to a PPI mis-selling claim on the basis that the Claimants had already been offered speedy justice and full redress under a redress scheme - Christopher and Claire BINNS v Firstplus Financial Group Plc  EWHC 2436 (QB). This case underlines that the Court will not allow claimants to pursue litigation where adequate redress is available under an existing redress scheme.
The Claimants (via their solicitors) made a complaint for mis-selling of PPI under the specific rules for handling PPI complaints in Appendix 3 of the Dispute Resolution Handbook, referred to by the Judge as the “FSA Scheme”. They reserved the right to litigate. The claim under the ‘FSA Scheme’ resulted in an award for full monetary compensation for losses incurred, including interest, but no legal costs. The Claimants did not accept this offer and commenced a County Court claim for damages, asserting that additional damages in the form of legal costs would ordinarily be awarded in litigation proceedings. The Defendant applied to strike out the claim under CPR Part 3.4(2)(a), which states that the court may strike out a statement of case if it appears to the court that “the statement discloses no reasonable ground for bringing or defending the claim”.
Albeit reluctantly, the district judge in the first instance allowed the claim to proceed on the basis that the County Court claim included a claim under section 140A of the 1974 Consumer Credit Act (unfair relationship) which had a prospect of further damages.
However, on appeal, the judge disagreed and described it as be “a construct of fancy to suggest the claimant[s] would obtain more in the litigation“. Striking out the claim, he held that litigants should follow the ADR route “when there is a perfectly good scheme that offers (i) speedy justice and (ii) full redress” and that full redress relates to “matters intrinsic to the case and not to costs which are adjunctive to it” (i.e. not the legal costs the Claimants were seeking). The key to this case was that “full redress” had been offered and the offer remained open.
Under other redress schemes, it may not be so clear cut that an offer of “full redress” has been made and therefore may not result in a claim being struck out so readily. However, in such cases, customers need to be aware of the cost consequences of not pursuing available ADR routes (which were addressed in detail in the case of Andrew and others v Barclays Bank PLC and Carroll v Egg Banking PLC  EWHC B13 (Mercantile)). This case is a useful reminder of the importance of customers carefully considering whether they need to issue a claim at all pending the outcome of a redress scheme, and where they have already done so, whether they ought to consider agreeing to a stay.