Misrepresentations as Continuing Acts, Broad s6(4) Suspension, and Court of Session Jurisdiction for Consumer Credit Act Unfairness in Group Proceedings

Introduction

In William Mackie (Representative Party) v Mercedes-Benz Group Aktiengesellschaft and others [2025] CSOH 94, Lord Sandison addresses pivotal preliminary issues in large-scale Scottish group proceedings concerning alleged NOx emissions “defeat devices” in Mercedes-Benz diesel vehicles. The judgment deals with:

• Prescription (time-bar) under the Prescription and Limitation (Scotland) Act 1973—especially section 11(2) and section 6(4) (both pre- and post-amendment regimes),
• The adequacy and specificity of pleadings in mass fraud and misrepresentation claims within group proceedings,
• The scope of delictual negligence for misstatement (assumption of responsibility) in consumer-facing product contexts,
• The contours of unlawful means conspiracy in Scots law, and
• Jurisdiction and prescription for “unfair relationship” claims under sections 140A–140B of the Consumer Credit Act 1974 (CCA).

The action is the Scottish analogue of “diesel emissions” litigation. Mr Mackie sues as a representative party on behalf of thousands who bought or leased Mercedes diesel vehicles alleged to contain prohibited “defeat devices” contrary to EU Regulation 715/2007 (and related regulatory instruments), relying on fraudulent and negligent misrepresentation, unlawful means conspiracy, breach of statutory duty, and Consumer Credit Act remedies.

Summary of the Judgment

Lord Sandison orders the case to proceed to a proof before answer (trial on evidence with legal questions reserved) on almost all issues, emphasizing the distinct approach to pleadings and fair notice in Scottish group proceedings. The key holdings include:

• Group proceedings pleading standard: In mass claims, fair notice is assessed contextually. A representative party need not plead at the granularity expected in a single pursuer action; summary pleading of generic issues is acceptable where proportionate and fair (paras [105]–[113]).
• Fraud and misrepresentation: Fraudulent misrepresentation averments are sufficiently specified to go to proof, including where representations to consumers are implied by certificates of conformity and the commercial presentation of vehicles as emissions-compliant (paras [109]–[114]).
• Negligent misstatement duty: The court articulates a principled, two-limb test restricting when an assumption of responsibility arises for consumer-facing statements. Claims in negligence are relevant where statements (i) contain factual material directly on emissions compliance and (ii) are made in a transactional context inviting reliance (e.g., sales/marketing; certificates of conformity). This supports negligence claims particularly against the first and second defenders regarding certificates of conformity; negligence claims against other defenders appear weak absent direct statements (paras [115]–[121]).
• Unlawful means conspiracy: The case is relevantly pled for inquiry. Scots law focuses on “absence of just cause or excuse,” permits constructive intent where unlawful conduct is directed at a category (purchasers/lessees), and does not rigidly import English debates about knowledge of unlawfulness; the alleged fraudulent misrepresentations can constitute the unlawful means instrumentality (paras [123]–[133]).
• Prescription—section 11(2): A major clarification: misrepresentations can be “continuing acts” for s11(2), not merely acts with continuing effects. A representation reasonably relied upon may be continuing until withdrawn or until the representee discovers the truth; this can postpone the commencement of prescription (paras [139]–[149]).
• Prescription—section 6(4): “Fraud” under s6(4)(a)(i) bears a broad bankruptcy-style meaning—“deliberate acting intended (or calculated) to induce” forbearance—and “error induced by words or conduct” under s6(4)(a)(ii) is equally broad. The court rejects attempts to recast s6(4) with an objective “reasonable person would be induced” filter, and confirms practical pleading onus: creditor pleads primary s6(4) facts; debtor pleads the “reasonable diligence” proviso, with the overall question for proof (paras [150]–[160]).
• Prescription—amended section 11(3)/(3A): For post-2017 acquisitions, constructive awareness (loss, causation by a person’s act/omission, and identity) is a mixed question of fact and law; claims proceed to proof (paras [161]–[163]).
• CCA jurisdiction: The Court of Session has jurisdiction under s140B(2)(c) CCA (“other proceedings... where the amount paid or payable under the agreement is relevant”), not just the sheriff court. Alternatively, jurisdiction arises through CJJA 1982 s22(4) as ancillary/incidental to the main claims (paras [134]–[137]).
• CCA prescription: Adopting Smith v RBS, the unfairness cause of action is continuing during the relationship. In Scots law, it is subject to five-year prescription from the end of the credit relationship, with s6(4) potentially suspending (paras [164]–[165]).
• Competition law averments: Alleged cartel findings are admissible contextually to knowledge/intent; they are not a standalone cause but can inform fraud/unlawful means (paras [166]).

The case is put out by order for case management on any deletions and next steps (para [167]).

Detailed Analysis

1) Group proceedings: fair notice and proportionate pleading

Lord Sandison sets an important tone for Scottish group litigation. He stresses that group proceedings are a single representative action delivering a single decree, with the court’s objectives of access to justice and efficient case management (paras [105]–[108]). The balance of fair notice differs from ordinary litigation:

• The summons need only “summarise” the circumstances (RCS 26A.19(2)(d)).
• Granular particulars for each of tens of thousands of claimants are impracticable; fairness can be achieved by generalised averments of common issues.
• Refusal of probation at debate is appropriate only where the case is “bound to fail”—and, critically, in group actions, only if bound to fail for all members (paras [106]–[108]).

This approach frames all subsequent discussions of specification—especially for fraud and conspiracy—in a flexible, access-to-justice oriented way.

2) Prescription: the architecture applied

The court separates members into cohorts by acquisition date and the relevant statutory regime:

• Pre-1 June 2017 acquisitions: unamended s11(2) and s6(4) govern (para [138]).
• On/after 1 June 2017 acquisitions (and pre-2017 claims surviving past 1 June 2022): amended s11(3)/(3A) apply prospectively (para [161]), with s11(2) unchanged in substance.
• Amendments to s6(4) (from 28 Feb 2025) are not material here (paras [34], [161]).

2.1 Section 11(2): continuing act/omission—misrepresentation as a continuing act

The court accepts that s11(2) is about continuing acts/omissions, not merely continuing loss (paras [139]–[140]). The decisive step is to treat representations capable of having a continuing effect as potentially continuing representations. Drawing on Cramaso and related authorities, the court holds:

• Where a representation relates to a continuing state of affairs and it is reasonable to rely upon it, it can be treated as continuing until withdrawn, lapsed, or discovered to be untrue (paras [141]–[145]).
• This characterization can postpone the start of prescription under s11(2). It does not render the obligation imprescriptible: withdrawal or discovery stops the “continuing” nature, and the period then runs (paras [145]–[146]).
• Alleged misrepresentations in the case—certificates of conformity and emissions-compliance claims—fit this rubric; whether reliance continued until late 2020 is for proof (paras [145]–[146]).

The court leaves open, for later discussion, whether alleged continuing regulatory duties under EU instruments independently engage s11(2) (para [147]).

2.2 Section 6(4): suspending prescription for fraud or induced error

Two distinct gateways suspend the prescription clock:

• Fraud (s6(4)(a)(i)): “Fraud” is construed broadly in the bankruptcy-law sense—a deliberate acting designed to disappoint legal rights (paras [151]–[153]). Lord Sandison suggests “calculated to induce” is the operative standard (para [152]). On the pleadings, a concerted, dishonest scheme is averred; this comfortably engages s6(4)(a)(i) for proof (para [152]).
• Error induced by words or conduct (s6(4)(a)(ii)): The creditor need only aver that the debtor’s words or conduct did in fact induce an error that caused forbearance. The court:
  • Rejects importing a threshold that conduct must be such as to induce a reasonable person into error (para [157]);
  • Rejects a blanket rule that the same conduct cannot both give rise to the cause of action and engage s6(4) (paras [155]–[156]);
  • Confirms broad relevance of both active and passive conduct that induces a relevant error (paras [154]–[157]).

On the “reasonable diligence” proviso, the court adopts a practical pleading onus: once the creditor pleads the primary s6(4) facts, the debtor must plead why reasonable diligence would have uncovered the fraud/error earlier (paras [159]–[160]). What Dieselgate publicity should have prompted is for proof (para [160]).

2.3 Amended section 11(3)/(3A): constructive awareness

For later-acquiring members, the court holds that whether a claimant could, with reasonable diligence, have become aware of the three facts in s11(3A) (loss, causation by another’s act/omission, and identity) more than five years before suit is a mixed question for proof. The representative party’s case—that awareness only crystallised around late 2020—has sufficient specification to proceed (paras [161]–[163]).

2.4 Consumer Credit Act prescription

The court follows Smith v RBS and Patel:

• An unfair relationship under s140A is a continuing state; the ability to seek s140B orders endures during the relationship and for a post-termination period (para [164]).
• In Scots law, any claim for s140B relief is subject to five-year prescription from termination of the relationship, subject to s6(4) suspension (paras [164]–[165]).

3) Fraudulent misrepresentation: pleading standard in a group action

Applying the strictness of RBS v Holmes through a group-litigation lens, the court holds the pleadings give fair notice (paras [109]–[114]). The court accepts:

• What was said to be false (emissions compliance and registrability),
• How/when it was said (certificates, advertising, marketing, the commercial presentation of vehicles),
• Why it was false (alleged defeat devices and the regulatory backdrop), and
• Who can be responsible (signatories to certificates; corporate officers/directors; and crucially, corporate attribution can be wider than the directing mind test depending on the substantive rule’s policy: para [113]).

This is a practical recalibration of fraud-pleading in mass consumer harms, consistent with the court’s group proceedings philosophy of proportionality and access to justice.

4) Negligent misstatement: narrowing the assumption of responsibility

Lord Sandison synthesizes authority (Hedley Byrne, Smith v Eric S Bush, Henderson v Merrett, NRAM, JP SPC 4, Playboy Club) and fashions a clear test suitable for consumer product misstatement cases (paras [115]–[121]):

A defender assumes responsibility (thus owes a duty of care) for a consumer-facing statement only where:

1. The statement “contains factual material (now claimed to be negligently untrue) pertaining directly to the issue of the affected vehicles’ emissions compliance” (para [119]); and
2. The statement is made “in the context of a situation” aimed at encouraging an acquisition (e.g., sales/marketing, point-of-sale brochures, certificates) such that reliance for that purpose is reasonable (paras [120]–[121]).

Consequences:

• Certificates of conformity: paradigmatic of assumption of responsibility—relevant negligence claims against the first and second defenders proceed (paras [120]–[121]).
• General import/supply/finance acts: absent direct statements about emissions compliance, negligence claims against the third to sixth defenders are likely irrelevant (para [121]).
• However, statements that may be irrelevant for negligence can still be relevant for fraud, conspiracy, or prescription issues; the court will consider targeted deletions at a by-order hearing (paras [121], [167]).

5) Unlawful means conspiracy: directed-at-a-category, instrumentality, and knowledge

Building on JSC BTA Bank, OBG, and Total Network, the court distils Scots-law principles (paras [123]–[131]):

• Primary liability delict: Not just joint wrongdoing; focus on the absence of just cause or excuse (paras [123]–[125]).
• Directed-at-a-category: Unlawful conduct “directed towards” a category (here, purchasers/lessees) with likely injury can found liability, allowing constructive intent and avoiding a mere “foreseeability” test (paras [126]).
• Instrumentality: Unlawful means must be the instrumentality of harm; fraudulent misrepresentations to consumers fit (para [130]).
• Knowledge: The court sidesteps rigid English taxonomies about knowledge of unlawfulness (Racing Partnership; Kidd), focusing instead on whether there is any just cause or excuse. Deliberate falsehoods will ordinarily carry the requisite blameworthiness (paras [127]–[129]).
• Combination: Express agreement is not required; combination may be inferred from primary facts in a corporate group context. Staggered entry into the combination is permissible (paras [131]–[132]).

The claim proceeds to proof.

6) Consumer Credit Act s140A–s140B: Court of Session jurisdiction and fit within group proceedings

A key procedural holding: the Court of Session has jurisdiction to grant s140B orders when unfairness is raised “in other proceedings... where the amount paid or payable under the [credit] agreement is relevant” (s140B(2)(c)) (para [134]). The sheriff court’s jurisdiction under s140B(4) is exclusive only for a standalone debtor “application” under s140B(2)(a), not for unfairness raised incidentally in wider litigation. Alternatively, jurisdiction lies under CJJA 1982 s22(4) as ancillary or necessary to the decision in these proceedings (para [137]).

The court also holds that s140B relief can be coherently integrated with group proceedings, especially where unfairness is alleged to arise from common facts (e.g., misrepresentation) rather than individual debtor circumstances (paras [135]–[136]).

7) Competition law averments

Although no separate cartel claim is pursued, the judgment admits competition decisions (European Commission and KFTC) as relevant background to knowledge and intent regarding emissions control technologies, including SCR systems (paras [96]–[98], [166]). The court cautions against collateral “sideshow” but accepts their contextual relevance.

Complex Concepts Simplified

• Proof before answer: A trial where evidence is heard first, with final rulings on disputed legal issues “reserved” until after the facts are established.
• Prescription (Scotland): Time periods after which obligations are extinguished (not merely barred). The short negative prescription is five years (s6 of the 1973 Act).
• Section 11(2): If loss is caused by a continuing act/omission, the “date when loss occurred” (for prescription) is deemed to be when the act/omission ceased. Treating a misrepresentation as “continuing” can postpone the start of the five-year clock.
• Section 6(4): Suspends (stops) the clock where the creditor refrained from suing due to fraud or induced error, until the point the fraud/error could have been discovered with reasonable diligence.
• Assumption of responsibility (negligent misstatement): A duty of care arises where a maker of a statement may fairly be taken to have undertaken responsibility to a person (or identifiable class) to whom the statement is addressed for a specific transactional purpose; generalized statements to the world at large usually do not suffice.
• Unlawful means conspiracy: An intentional economic delict. Liability arises if defendants combine to use unlawful means directed at the claimant (or claimants’ category) as the instrument by which loss is inflicted, without just cause or excuse.
• Certificates of Conformity: Manufacturer documents asserting compliance with EU type-approval requirements; in this case, alleged to be central representations to ultimate consumers about emissions compliance.
• “Other proceedings” under CCA s140B(2)(c): A live case about something else (e.g., damages for misrepresentation) in which amounts paid/payable under a credit agreement are relevant—allowing the higher court to grant CCA remedies without a standalone sheriff court application.

Precedents and Authorities Cited: How They Shaped the Decision

• Group procedure: MacKay v Nissan (IH and OH) and Bridgehouse (BMW) inform the court’s flexible approach to pleadings and single decree in group actions (paras [59]–[61], [105]–[108]).
• Prescription fundamentals: David T Morrison; Gordon’s Trustees; Glasgow City Council v VFS (IH) guide the concurrence of damnum and injuria and diligence analysis (paras [29], [73], [79]).
• Continuing representations: Cramaso, McGowan; With v O’Flanagan (via Cramaso) underpin the “continuing representation” doctrine adapted to s11(2) (paras [141]–[145]).
• Section 6(4): Adams; Heather Capital; Rowan Timber; VFS (IH) and Dryburgh motivate a broad reading of “fraud” and an expansive, fact-led approach to “induced error” and diligence (paras [151]–[160]).
• Negligent misstatement: Hedley Byrne; Smith v Eric S Bush; Henderson v Merrett; NRAM; JP SPC 4; Playboy Club help frame the new two-limb test tailored to consumer contexts (paras [115]–[121]).
• Unlawful means conspiracy: JSC BTA Bank; OBG; Total Network guide the Scots-law focus on absence of just cause, instrumentality, and constructive intent directed at a category (paras [123]–[131]).
• Knowledge debates: Racing Partnership; Kidd (CSIH) are considered but not rigidly adopted; the court privileges principle over classification (paras [127]–[129]).
• CCA prescription and jurisdiction: Smith v RBS; Patel provide the continuing cause concept; CJJA 1982 s22(4) supports ancillary jurisdiction, with the court construing s140B(2)(c) to fit “other proceedings” (paras [134]–[137], [164]–[165]).
• Corporate attribution: Meridien; Dryburgh caution against an overly narrow “directing mind” test; attribution can be adapted to the policy of the substantive rule (para [113]).

Impact and Implications

For prescription strategy in Scotland

• Misrepresentations as continuing acts: A significant doctrinal development. Claimants in consumer misstatement cases can argue s11(2) postponement where representations were reasonably relied upon and not withdrawn, increasing survivability of older claims.
• Broad s6(4) suspension: The judgment’s generous, fact-led approach to fraud and induced error reduces the risk of early strike-out on prescription and pushes diligence disputes to proof—especially powerful in mass consumer contexts where asymmetries of information are acute.
• Amended s11(3A): The court sets the tone that constructive awareness is evidence-sensitive; early knockout arguments face a high bar.
• CCA timeline: Clear Scottish alignment with Smith v RBS; consumers with ended finance agreements have five years post-termination to invoke s140B, subject to s6(4).

For pleading and proving consumer misrepresentation cases

• Group pleading latitude: Proportionate specification suffices for fraud in mass claims; defenders’ superior knowledge informs the fair notice calculus.
• Negligence narrowed: The two-limb test filters out diffuse negligence claims against importers/distributors/financiers that did not make direct compliance statements, while preserving robust negligence claims against manufacturers issuing certificates or targeted compliance statements.
• Conspiracy calibrated to consumer harm: A path to trial where the alleged unlawful means is mass-market misrepresentation directed at a consumer class, without importing rigid English knowledge rules.
• Competition findings as context: Prior regulatory decisions can support inferences of knowledge/intent even if not constituting independent causes of action.

For jurisdiction and case-management of complex multi-issue group actions

• CCA relief in the Court of Session: This is a notable procedural precedent. Unfair relationship issues can be determined in the Outer House when raised as part of wider claims, enabling coherent, one-forum adjudication and avoiding fragmented sheriff court applications.
• Integrated remedies: Because amounts paid/payable on finance agreements affect damages calculus, s140B relief is apt for ancillary/incidental determination within the main action.

What Happens Next

The court has fixed a by-order hearing to manage any necessary deletions (notably, elements of negligence against non-speaking defenders) and to plan next procedural steps. A proof before answer will address core factual issues: the presence and nature of defeat devices, the content and reach of representations, reliance, when group members discovered the truth, what reasonable diligence would have uncovered, the existence and scope of any conspiracy, and the fairness of credit agreements.

Conclusion

Mackie v Mercedes-Benz is a cornerstone Outer House decision for Scottish mass consumer litigation. It delivers four principal contributions:

1. Prescription re-aligned to consumer reality: Treating misrepresentations as continuing acts under s11(2) and adopting a generous, principle-based s6(4) analysis makes early time-bar arguments much harder in complex, information-asymmetric cases.
2. Measured duty of care for negligent misstatement: The two-limb assumption-of-responsibility test filters negligence claims to contexts where reliance is invited and foreseeable—crucially validating certificates of conformity as a core locus of liability while trimming diffuse negligence claims.
3. Conspiracy focused on “direction” and instrumentality: The court’s principled approach, rooted in absence of just cause and conduct directed at a consumer category, provides a workable template for alleging unlawful means conspiracy in mass misrepresentation scenarios.
4. Jurisdictional coherence for CCA remedies: The Court of Session can grant s140B relief when unfairness is raised in “other proceedings” where finance sums matter, enabling one-stop adjudication in group actions and clarifying Scottish prescription for such claims.

Together, these holdings align procedural fairness, substantive law, and case management with the realities of contemporary group litigation. They will likely influence not only Scottish emissions claims (including related proceedings against other manufacturers) but also the broader design and defense of collective actions alleging consumer misstatements, product compliance misrepresentations, and unfair credit relationships.