Background: Canada Square v Potter

In the Canada Square Operations Ltd v Potter [2023] case, the Supreme Court ruled that the limitation period for bringing a claim can be extended under Section 32(1)(b) of the Limitation Act 1980 if the claimant can demonstrate that the defendant deliberately concealed a relevant fact. This ruling confirmed that time should not start running until the claimant became aware of the concealment, which in many cases involves undisclosed commissions in financial products.

The judgment was hailed as a significant victory for consumers, particularly those seeking compensation for financial mis-selling involving secretive commission payments, as is the case for up to 99% of motor finance agreements taken out since April 2007.

Time-Bar Arguments by Motor Finance Providers

Despite the clarity provided by the Supreme Court, many motor finance providers are still attempting to invoke the six-year time limit under the Limitation Act 1980 to dismiss claims. This tactic ignores the clear principles established in Canada Square v Potter, particularly the idea that consumers cannot be held to a time limit when they were unaware of the misconduct due to the provider’s concealment.

• Refusal to Acknowledge Concealment: Providers argue that consumers should have discovered the commission payments earlier, even when these were actively hidden from consumers.
• Rejection Without Investigation: Some providers seek to reject claims outright, citing time-bar rules, without properly considering whether the principles of Section 32 apply.
• Delaying Tactics: By delaying or rejecting valid claims, providers attempt to discourage claimants from pursuing their cases further, thus causing further consumer harm.

Why These Arguments Are Flawed

The Supreme Court’s ruling in Canada Square v Potter leaves no room for misinterpretation:

1. Deliberate Concealment: If the amount of commission was not disclosed at the time the agreement was entered into, and the consumer only discovered it later (e.g., through litigation or regulatory scrutiny), the limitation period begins from the date of discovery.
2. Public Policy: The ruling upholds the principle that companies should not benefit from their own wrongdoing. Using time-bar arguments to reject claims contradicts this principle.
3. Fairness to Consumers: Many consumers only became aware of these issues following regulatory investigations or court judgments, meaning their claims are valid under Section 32.

What This Means for Claimants

Consumers with motor finance agreements that included undisclosed commissions should not be deterred by time-bar arguments from providers. The Canada Square v Potter judgment reinforces their right to pursue claims, even if the agreement was entered into more than six years ago. Claimants should:

• Seek expert legal advice or assistance from regulated claims management firms.
• Challenge any time-bar rejection by referencing the Supreme Court’s ruling.
• Act promptly to ensure their claims are not delayed unnecessarily.

A Call to Action for the Financial Conduct Authority

It is clear that motor finance providers are not treating complainants fairly, going so far as to ignore the Supreme Court ruling in Canada Square v Potter. It is now clear that the regulator must step in and provide a clear deterrent to motor finance providers that continue to cause significant consumer harm. Continuing to reject claims on time-bar grounds without proper consideration further undermines trust in the financial services industry. The Financial Conduct Authority must:

• Enforce significant financial penalties for firms that handle complaints contrary to UK law.
• Order that firms pay additional redress where complaint handling is deemed to be inadequate.
• Consider a separate body to take over complaints from the outset, at a cost to finance providers that cannot be trusted to fairly handle complaints.

Conclusion

The Supreme Court’s judgment in Canada Square v Potter has set a clear precedent for extending the time limits on claims involving undisclosed commissions. Motor finance providers must adapt their practices accordingly and immediately cease attempting to use time-bar arguments to reject valid claims. Consumers are encouraged to stand firm and seek professional assistance to ensure they receive the compensation they deserve.