Last week the UK Supreme Court gave judgment in Canada Square Operations Ltd v Potter [2023 UKSC 41], another Supreme Court decision concerning limitation issues in a PPI claim that will be welcomed by PPI claimants and claims management firms. 

The claim

On December 14, 2018 Mrs Potter commenced proceedings against Canada Square to obtain an order under the Consumer Credit Act 1974 that Canada Square compensate her for PPI payments made (less the amount she had been compensated under a redress scheme established by the FCA). 

Over 95% of the amount of the PPI payments constituted Canada Square’s commission. Canada Square did not inform Mrs Potter about this commission. She only became aware of it in November 2018 when she took advice from solicitors (and it was not suggested that she could with reasonable diligence have discovered the concealment any earlier).  

The limitation issue

Canada Square argued that Mrs Potter’s claim was time-barred. The County Court, High Court and Court of Appeal found in Mrs Potter’s favour. The Court of Appeal found that both section 32(1)(b) and section 32(2) of the Limitation Act 1980 applied with the effect that the six-year limitation period did not start to run until Mrs Potter became aware of the commission in November 2018. 

Section 32(1)(b) postpones the commencement of the ordinary limitation period where “any fact relevant to the plaintiff’s right of action has been deliberately concealed from him by the defendant“. Section 32(2) provides that, for the purposes of section 32(1) “deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty“. 

The Supreme Court also found in Mrs Potter’s favour. The Supreme Court agreed with the Court of Appeal that Canada Square deliberately concealed facts relevant to Mrs Potter’s action such that section 32(1)(b) applies. As to the meaning of deliberately concealed, the Supreme Court clarified that:

1. A fact will have been deliberately concealed if it has been kept secret either by taking active steps to hide it or by failing to disclose it; and
2. The claimant need not show that the defendant was under a legal, moral or social duty to disclose the fact, nor must the claimant show that the defendant knew that the fact was relevant to the claimant’s right of action, contrary to previous Court of Appeal authority.

However, the Supreme Court did not agree that Canada Square’s conduct amounted to deliberate commission of a breach of duty for the purposes of section 32(2) of the Limitation Act. A claimant who wishes to rely on section 32(2) must show that the defendant knew it was committing a breach of duty or intended to commit a breach of duty. Recklessness is not sufficient.

What’s next?

The Supreme Court’s ruling on the meaning of “deliberately concealed” for the purpose of section 32(1)(b), which widens the scope for the application of section 32(1)(b), will be welcomed by the claimants in the approximately 26,000 PPI claims of a similar nature in the County Courts referred to by the Supreme Court.

Further, the Potter case, along with the recent Smith case (see our previous briefing) are likely to lead to more claims being brought by consumers (and claims management firms) who had previously thought their claims might be time-barred.

Philip Linton is a partner and Louise Youngman is a senior associate in the dispute resolution practice at Ashurst.