The Official Receiver v Shop Direct Finance Company Limited [2023] EWCA Civ 367

Michael Gibbon KC and Maxim Cardew acted for the Official Receiver in his successful appeal to the Court of Appeal against the judgment in Shop Direct Finance Company Limited v The Official Receiver [2022] EWHC 1355 (Comm); [2022] BPIR 1280. 

The case arose against the backdrop of the PPI mis-selling scandal, which has been described as by far the largest consumer redress exercise in the UK’s history. 

The Official Receiver is the trustee in bankruptcy of hundreds of thousands of bankrupt customers of financial institutions, and in that capacity has referred mis-selling complaints to a large number of institutions which sold PPI.  These institutions included Shop Direct, which is the UK financial services arm of The Very Group, which from the mid-1980s to 2014 sold various forms of PPI to its customers. 

The case focused on the proper interpretation of a limitation provision in the FCA’s Dispute Resolution Handbook (DISP) concerning the referring of complaints. The  particular question was (when a customer is bankrupt) whose “awareness” mattered to start the time for making a complaint running under DISP 2.8.2R(2)(b): the customer’s, or the trustee in bankruptcy’s?

Shop Direct brought proceedings seeking declarations.  At first instance it sought and obtained a declaration that it was the awareness of the Official Receiver (as trustee in bankruptcy) that was relevant.  It  also sought a declaration that the Official Receiver’s complaints were already time-barred.  This latter argument was rejected by the Judge at first instance and not appealed. 

Overturning the declaration made by the High Court, the Court of Appeal accepted the Official Receiver’s submission that the correct construction of DISP does not turn on technical aspects of the law of insolvency, which would not be in keeping with the relatively simple scheme that DISP was intended to create.  It also adopted the Official Receiver’s position that questions of limitation were best resolved in fact-specific contexts rather than as abstract legal questions. 

The decision applies not just to PPI complaints but all complaints made under DISP.  The case will therefore be of widespread significance to both insolvency practitioners and financial institutions.  It also provides useful clarification of the proper approach to the construction of DISP.     

Michael and Maxim were instructed by the Legal Services Directorate of the Insolvency Service on behalf of the Official Receiver.