Andrew & Ors v Barclays Bank Plc

Factual and Procedural Background

This opinion addresses applications by a financial institution ("the Bank") to stay five claims alleging mis-selling of payment protection insurance ("PPI"). Four claims are against Barclays Bank, and one is against Egg Banking Plc, now owned by Barclays. The claimants are split into two groups: the first group ("the Andrew claimants") includes two claimants represented by one set of solicitors and counsel, and the second group ("the Gatley claimants") includes three claimants represented by another firm and counsel. The Bank seeks an eight-week stay ("Scheme Stay") to allow claims to be processed under a Financial Services Authority (FSA) complaint handling regime ("the Scheme"). Additionally, there is a proposed stay pending the Supreme Court's decision in a leading PPI case ("Harrison Stay"). The Andrew claimants consent to the Harrison Stay but object to the Scheme Stay, primarily on costs grounds. The Gatley claimants consent to the Scheme Stay but oppose a wider Harrison Stay. The court also provides general guidance on the operation of the Scheme and the appropriateness of stays in PPI litigation.

Legal Issues Presented

1. Whether the court should grant an eight-week stay (Scheme Stay) to allow PPI claims to be processed under the FSA's complaint handling Scheme.
2. Whether the court should grant a stay pending the Supreme Court's decision in the Harrison case (Harrison Stay).
3. Whether costs orders should be made against claimants who resist such stays.
4. Whether general guidance should be given regarding the use of the Scheme and stays in PPI litigation.

Arguments of the Parties

Bank's Arguments

• The Bank seeks an eight-week stay to process claims under the FSA Scheme, which is a cost-effective and expeditious alternative to litigation.
• The Bank argues that claimants who proceed to litigation without engaging with the Scheme risk adverse costs orders.
• The Bank supports a prospective stay pending the Supreme Court decision to avoid duplicative litigation and costs.
• The Bank contends that letters before claim sent by claimants were not treated as complaints under the Scheme but that going forward all claims will be treated as complaints.

Andrew Claimants' Arguments

• They consent to the Harrison Stay but would have resisted the Scheme Stay if it had been the only application.
• They contend they should not bear the Bank's costs of the Scheme Stay application as it would have failed.
• They rely on the fact that letters before claim were sent but not responded to, justifying their litigation.

Gatley Claimants' Arguments

• They consent to the Scheme Stay but oppose any wider Harrison Stay.
• They argue that the Bank could have treated prior letters before claim as complaints, and delay in doing so counts against the Bank on costs.
• They raise concerns about limitation and fading memories but do not provide specific evidence of prejudice from delay.

Table of Precedents Cited

Court's Reasoning and Analysis

The court recognized the extensive volume of PPI litigation and the introduction of the FSA Scheme as a structured, cost-effective, and expeditious alternative dispute resolution (ADR) mechanism. The court emphasized the overriding objective under the Civil Procedure Rules (CPR) to deal with cases justly and proportionately, promoting ADR where appropriate.

The court noted that the Scheme provides an eight-week period for complaint resolution, with high success rates and significant cost savings compared to litigation. It acknowledged that claimants who litigate without engaging with the Scheme risk adverse costs consequences under the principles set out in Halsey.

The court rejected the argument that stays under the Scheme fetter access to justice, emphasizing that the court has power to impose stays to facilitate ADR and that such stays are neither disrespectful nor unjust. It also considered concerns about delay, limitation, and quality of evidence, finding that an eight-week stay is modest and unlikely to prejudice claimants given the antiquity of many claims.

Regarding the Andrew claimants, the court found there was some delay by the Bank in engaging with complaints but would have ordered a Scheme Stay if required. On costs, the court declined to order costs against either party, resulting in no order as to costs.

For the Gatley claimants, the court refused a stay for one claimant without unfair relationship claims but granted a prospective Harrison Stay for others where such claims were made, subject to review. Costs were again ordered as no order, balancing the parties' conduct.

The court provided general guidance encouraging claimants to use the Scheme before litigation, outlining the procedural steps and emphasizing the risk of costs sanctions for non-engagement. It stressed the importance of letters before claim and the Bank's obligation to treat claims as complaints under the Scheme going forward.

Holding and Implications

The court’s final decision was as follows:

• The Bank’s application for an eight-week Scheme Stay was granted as appropriate in principle, though the Andrew claimants had consented only to a Harrison Stay.
• A prospective stay pending the Supreme Court's decision in the Harrison case was ordered for relevant Gatley claimants, except where no unfair relationship claim was made.
• No order as to costs was made between the Bank and the claimants in relation to the stay applications.

Implications include a clear judicial endorsement of the FSA Scheme as a suitable ADR mechanism for PPI claims, with encouragement for claimants to engage with it prior to litigation. The court signaled that refusal to engage with the Scheme may attract adverse costs consequences. The decision promotes judicial case management consistent with proportionality and cost-efficiency principles. No new binding precedent was established, but the court’s general guidance is intended to assist future cases in managing PPI-related claims and stays.