Tew & Ors v BoS (Shared Appreciation Mortgages) No 1 Plc & Ors

This litigation involves shared appreciation mortgages (“SAMs”). The SAMs are mortgages which were offered for a period in 1997 and 1998 by certain lenders (Bank of Scotland (“BoS”) and Barclays Bank) which are unconventional in relation to their interest payments and redemption terms. For present purposes they can be grouped into two categories which share a common feature. The common feature is that the loans are not repayable at any fixed time. They are repayable in the event of a sale, or the death of the mortgagor. On redemption the mortgagor pays the principal outstanding and a specified percentage of any increase in value of the property over the purchase costs. That percentage is a multiple of the loan to value ratio. The multiple varies depending on the category into which the mortgage falls. One category has no interest charge. In those cases the multiple is usually 3 times loan to value ratio. The other category has a fixed interest charge, and in this case the multiple is 1.

In these actions various claimants seek to challenge the fairness of those terms under the Unfair Terms in Consumer Contracts Regulations 1994 and the fairness of the relationship under sections 140A to 140C of the Consumer Credit Act 1974. When I say “these actions” I refer to over 100 which have been commenced and where a first pleading, or equivalent, has been served. There may be as many as another couple of hundred claimants who wish to make claims, but apparently subject to the making of a GLO.

On 5^th October 2009 Chief Master Winegarten made a Group Litigation Order (“GLO”) under CPR 19. It identified various issues as the group litigation issues for the purposes of the order and made various administrative provisions. The GLO issues, with supporting definitions, appear at Appendix 1 to this judgment. It is regrettable that I have to include the precise terms of such a long document in this judgment, but the submissions before me turned on its precise terms, and it is more convenient to confine them to an Appendix. I shall have to return to the precise terms of that order in due course. BoS sought to appeal that order on the basis of the principal GLO issue which it identified, and I gave permission to appeal. That appeal is the first of the two matters before me.

The second matter is an application for case management directions within, or in place of (if the appeal succeeds) the existing GLO. So far as the application is within the GLO, the claimants in fact seek to redefine the GLO issues. Their proposals are shown in Appendix 2 to this judgment (included in an appendix for the same reasons as those given in the preceding paragraph).

Logically speaking, the first thing that I have to decide is the appeal from the Master’s order under which he made the GLO. Having decided that, I would then have to decide how this litigation ought to proceed. However, it has transpired that the claimants no longer support the first or principal provision of the Master’s GLO, and their directions in essence seek to redefine the GLO issues. The banks’ position, or at least BoS’s, is that the GLO was inappropriate and the redefined issues are no better, and they say that the litigation should proceed on the basis of testing the issues in lead cases. BoS’s position is that there should not be a GLO. Barclays’ is that it has no particularly strong view one way or another about whether there should be a GLO, but it joins with BoS in maintaining that the claimants have not identified useful issues for determination and in saying that a lead cases regime should be applied.

In the light of the submissions of the parties, the issues in the appeal and in the directions hearing seem to me to be inextricably mixed, and the underlying question is how these proceedings are to be taken forward – whether it should be on the basis of the claimants’ approach to the issues or on the defendants’. When the real issues have been identified, I can then decide whether a GLO is the right way forward, and the terms of that GLO.

The principal legislative provisions which are to be in issue are the following.

First, there is the 1994 Regulations. Regulation 5 provides that any unfair terms in a contract concluded by a consumer with a seller or supplier shall not be binding on the consumer. It is accepted that the claimants are consumers and the banks are sellers or suppliers. Unfair terms are defined in Regulation 4(1), and Regulation 4(2) provides that an assessment of the unfair nature of a term shall be made:

The emphasised words demonstrate that the relevant fairness inquiry requires a consideration of all surrounding circumstances. The fact-sensitive nature of the inquiry is emphasised by the decision of the House of Lords in Director-General of Fair Trading v First National Bank plc [2002] 1 AC 481.

Regulation 3(2) provides that:

I turn now to the 1974 Act (as amended). The relevant provision is section 140A, which allows the court to make an order under section 140B if it determines that the relationship between a creditor and debtor is unfair for one or more of three identified reasons. Subsection (2) provides:

The claimants have sought to obtain a GLO on the footing that it would be right for the court to determine, if it thought fit to do so, that the criticized terms could be seen to be unfair by looking at the terms, their potential effect, and their actual effect in monetary terms, but excluding any consideration of the personal circumstances and qualifications of the borrowers or the actual circumstances of any of the loans. This would still be a significant evidential exercise, involving evidence of what the outstanding obligations would yield to the bank if there were a redemption now (which is far more than the banks would have got under a conventional mortgage, because of the large increase in property values) and considerable expert evidence. It would not, however, allow evidence such as, for example, the fact (if it be the case) that a particular borrower was well-heeled, well-informed, well advised and apparently entered in the transaction with his eyes wide open (to take a strong case); nor would it allow any lesser or different case to be advanced by the banks. This is (it now appears) not because as a matter of law such an inquiry would be excluded, but because the facts are so “bad” that such evidence would make no difference. This is the thinking behind GLO issue 1 in paragraph 3 of the Master’s order. Although the Master did not give reasons for the order that he made (which is one of the grounds of appeal), some evidence of his reasoning comes from a letter that he wrote subsequently to the Chancellor asking for his consent to the order and for a judge to be nominated oversee the litigation. In that letter he said:

Thus the order seems to have been made on the footing that Issue 1 was a proper GLO issue and was something that the court could properly, and would be likely to, adjudicate on. The same theme runs through the other GLO issues – the court is to be asked to consider whether it is possible and right to consider fairness issues by reference only to matters that are common to all cases and without reference to matters which are referable to individual cases and/or claimants. Whether or not this is appropriate, proper or sensible is the principal issue dividing the parties.

By the time of the hearing before me the claimants had thought better of the formulation of Issue 1 and of the approach that the court should adopt. In paragraph 26 of his skeleton argument Mr David Lowe QC, who appeared for the claimants, conceded that “paragraph 3(1) is not an issue between the parties. The Issue raises a pure question of law to which the answer is .. ‘no’. The Issue misidentifies the preliminary issue which the court needs to determine, which is whether it ought to limit, to a greater or lesser extent, the investigation of Individual Circumstances until the Common Circumstances have been properly investigated and the Central Common Issues, among others, have been tried and it knows whether, or to what extent, the Individual Circumstances require a more detailed investigation and in what precise context that investigation is to be conducted.” It presented its revised proposed GLO issues, which I have already attached as Appendix 2. At their heart are issues 3 to 5, which are described as Central Common Issues, and they maintain their attempt to try to get the unfairness decided by reference to Common Issues and keeping away from Individual Circumstances. The court is apparently to be invited to decide either that no Individual Circumstances can be relevant, or to arrive at some sort of prima facie conclusion on unfairness based on Common Circumstances, with a view to seeing whether that conclusion (if favourable to the claimants) could be displaced by Individual circumstances in individual cases. I think that the proposals can be fairly described as Byzantine in their complexity, with lots of interlocking and dependent questions.

In argument Mr Lowe, and Mr Henderson who shared the burden of making oral submissions, maintained that approach to the GLO and the relevant issues. They said that the issues which they had identified were primarily required to identify the cases which were to be put under the management structure of the GLO, and that the actual issues to be decided from time to time would or could be refined. The claimants had not actually changed their position from that adopted before the Master, though Mr Lowe accepted that there could have been misunderstandings in that respect. The approach which underpinned their proposed GLO and its operation was the same. The court was to be asked to consider, and come to such conclusions as it could, on part of the material (the common issues), in the hope that that decision would make it unnecessary to look at the other part. It was also proposed that the court would be able to give guidelines for dealing with the other cases – the example given was that the court would be able to, and would, provide a list of the things that a borrower would have had to have understood (as a minimum) if that borrower was to be said to have sufficient understanding to make the transaction fair. It was possible and realistic to approach the matter in that way; hence the refined GLO issues in Appendix 2.

In deciding on the terms of a GLO it is important not to confuse the GLO issues with formulations of the issues which will ultimately have to be determined in order to decide the litigation. I say that because it seemed to me that from time to time the claimants, and possibly others, confused those two concepts. GLO issues define common elements in the litigation by reference to which the scope of the GLO is defined. When it is defined, the court will set about determining the litigation in a number of ways – the trial of preliminary issues, the trial of test cases, the trial of lead cases, and so on. At that stage it might make the sort of orders proposed by the formulation in Appendix 2 (though hopefully without the complexity).

CPR 19.10 provides that a GLO is:

The claimants’ proposals for GLO issues are structured so as to keep an actual consideration of individual circumstances out of the actions and away from the court. At first I had the impression that that was because the claimants’ advisers thought that that was required because what they needed was common issues, and individual circumstances could not fall within common issues because they differed from case to case. However, it transpired that the situation was more calculated than that. The claimants’ desire is not to have to embark on any consideration of individual circumstances, and to confine the case to factors operating in all cases, because they do not wish to have litigation which goes into those issues at all, for their own tactical reasons. At some stages in the argument it was said that if the litigation was to involve looking at the facts of individual cases then the claimants would be advised not to pursue the litigation at all, and that they would not do so. This is despite the fact that both Mr Lowe and Mr Henderson, in their respective submissions, acknowledged that some individual circumstances could be relevant on some analyses of the cases. At other stages it was suggested that the situation was not quite as black and white as that, and that it might be the case that the litigation would be pursued even if at some stage it was necessary to consider the individual circumstances of individual transactions. There was a heavy degree of equivocation and ground-shifting on the point, but what became apparent is that the claimants’ formulation of the GLO issues was a deliberate attempt by them to formulate the GLO issues (and thus confine the proceedings, at least for the time being) so as give them the shape that they thought they should have and exclude areas of debate which the banks maintained were part of the required overall assessment in order to conduct the inquiry required by the statutory material.

The claimants justified their stance by saying that by seeking to have cases determined on the basis of common material there would be, or could be, an efficient and cheaper determination of the cases. Thus there was a real chance that the court, without being referred to any actual individual circumstances, could conclude that the returns to the banks were so great, and so much greater than a proper retail banking risk/reward ratio would normally justify, that the transactions would inevitably be characterised as unfair under the two sets of legislation and the individual circumstances were irrelevant. If that happened, then one would not have to incur the extra cost of going into any individual cases, even on a lead case basis, and costs and time would be saved. It was also suggested that this reflected evidential reality, because it was said that many of the borrowers were elderly and they would not able to remember precisely what they did and did not know, or understand, in a transaction which took place over 10 years ago, so there would not be much evidence available anyway.

Mr Henderson also presented this as an “access to justice” point. He said that the claimants were all individuals, none of them really wealthy, and none of them had the funds, or outstanding mortgage liabilities, which would sensibly justify their taking individual proceedings. Most could not fund their own cases to trial, and they therefore needed group support. That required that they identify the common issues that arise, and they needed to ask the court to deal with the cases in a single trial or a small number of trials, on a group basis, so that their claims could be properly ventilated in a shared way. This not only justified a GLO; it was also (I think) said to justify the formulation of the issues in the claimants’ preferred way, because that reflected the common interest and would generate a determination which would dispose of all the claims.

This approach seems to me to be fundamentally flawed. The adjudication of the claimants’ various claims raises the issues that it raises, not the issues that the claimants would like to say that it raises, or only the issues that they would like to have adjudicated. I must form a view of the extent to which any given issue will arise. It does not cease to arise merely because the claimants would like to run the case without it. True it is that the manner in which the claimants’ Particulars of Claim are formulated relies on the sort of common issues (basically on the bank’s side of the transaction) that I have referred to above, and that they do not go into the circumstances of individual transactions. However, that does not mean that the individual circumstances will not be an issue in these claims. It can be safely predicted, on the basis of the evidence and submissions before me, that if the claims were pleaded out the banks’ Defences would take the point that the actual circumstances rendered the relevant terms, or the relationship, fair because, for example, the claimant in question had sufficient understanding, and the transaction made personal sense for that individual. That those circumstances are capable of being relevant is, in my view, quite plain from the wording of the legislation, whose pertinent words I have emphasised above. At the end of the day that proposition was not disputed by counsel for the claimants.

In those circumstances it seems to me to be quite wrong to allow the GLO issues to be phrased in such a way as involve a shutting out of individual circumstances from the scope of the litigation. It is not an accurate way of describing the litigation and amounts to a form of pre-judgment of some issues. Accordingly I reject the claimants’ proposed GLO issues because of their underlying thesis. I would add that I would also reject the Appendix 2 issues as being too detailed to amount to GLO issues. They betray a confusion between GLO issues and the issues arising in the course of litigation.

That does not, however, necessarily mean that the claimants’ suggested way of deciding the case cannot take effect as a case management approach, which is the other way I think the claimants would wish to assert their wishes. A determination of that point requires an assessment of whether that would be a sensible way of going about deciding the various cases. I therefore turn to that question, because it goes to the question of how this litigation is to be managed, whether under a GLO or not, which in turn might affect the question of whether there should be a GLO in the first place.

I approach this issue from two angles. First, there is the broad question of whether seeking to manage this case so as to see if it can be decided on the basis of common issues without reference to individual cases is a sensible and practical approach. The second angle is whether the formulation of the issues in Appendix 2 is itself sensible or practical. Those questions are, of course, closely related.

As to the first, I am firmly of the conclusion that as a general approach it is neither sensible nor practical. It does not reflect the likely real issues, nor does it encapsulate a sensible method of trying them. On the face of the legislation, the facts of individual cases are capable of affecting the assessment of fairness, and they cannot be disregarded as such. I have set out the relevant wording above, with appropriate emphasis. So one cannot ignore them as a matter of law, and indeed Mr Lowe does not say one should. So his first case involves the hope that it can be established as a matter of fact that the effect of the terms is so bad that one cannot imagine any personal circumstances which would redeem them. But even Mr Lowe did not push his case quite that far because he accepted that if a person genuinely understood the product and knew what he was letting himself or herself in for, then that claim ought not to succeed. So the relevance of individual circumstances is conceded. His first answer to that was that it would be contended that the level of knowledge which any individual would have to have would be so high that in practice no customer would have it. So the thesis involves testing the matter against a hypothetical customer and finding that that customer cannot really exist, or is unlikely to exist. It seems to me to be highly undesirable to approach that factual matter in that hypothetical way, especially when one has got real facts, involving real people and real transactions, who can be used to test the transaction instead.

The position is not improved by the suggestion that at the end of the common factor stage of the inquiry, the court (assuming that it was prepared to come to the conclusion that the terms and relationship were, having regard to the common factors on the banks’ side of the line, unfair) would then give guidance as to the sort of points that would make it fair on the consumer’s side of the line. That would be done without reference to any actual cases. That is not the function of the court in litigation, even in group litigation. Giving such guidance in the abstract is more the function of consumer protection, or regulatory, authorities. Those authorities are not called on to decide individual cases. Courts decide individual cases and do not give such guidance in the abstract. It may be that, having heard evidence and argument on individual cases, a court might be able to say things which guide for the future, and indeed that is part of the benefit of properly constructed group (or multi-party) litigation. But that is done on the basis of real cases where real facts are considered.

That leaves open Mr Lowe’s alternative way of approaching matters, which is to decide unfairness without looking at personal circumstances with a view to achieving a sort of prima facie finding of unfairness and then (if necessary) feeding the individual circumstances into the mix at that stage (see for example paragraph 8 in Appendix 2). That does not seem to me to be a proper or sensible way of going about the litigation. The inquiry as to fairness is a one stage inquiry looking at both sides of the transaction, not a two stage inquiry. That is plain enough from the statute, and the sensible conduct of this litigation requires it. The whole notion of fairness or unfairness involves the impact of matters on a person – in this case, a counterparty. Absent the counterparty, one could reach some conclusions about (for example) normal returns, the anticipated returns on these loans and the actual returns on those loans, and one can compare those returns to other things. However, I do not think that any finding of fairness can arise without asking “fairness towards whom?”. So it is necessary to measure things against a counterparty. One could, of course, hypothesise a counterparty with certain qualities, or hypothesise the events of the transaction, and answer the question on the basis of that hypothesis, but I do not think that that is proposed and if it were I would reject it for the same reasons as I would reject Mr Lowe’s first way of running the cases. It is unnecessary and inappropriate to hypothesise a counterparty when you have got some real ones who are complaining. This is not a case where one of necessity has to hypothesise a typical consumer, as one does in a regulatory challenge. There are real consumers, with real transactions, who are complaining that the transactions are unfair to them. It is in their particular contexts that the unfairness falls to be assessed, and it is not a sensible exercise to divide that exercise up in the way suggested.

All this applies to the underlying thesis of the Appendix 2 proposals, to which I now turn. So far as their actual terms are concerned, there are also serious (and sometimes related) problems with the particular formulation of those proposals whether viewed as GLO issues or as case management proposals. They, or some of them, are as follows:

They are undesirably complex. It is a textual roadmap to certain possible results, and not an appropriate formulation of GLO issues. Furthermore, they are unnecessarily complex even as a formulation of case management directions.

Some of them are manifestly inappropriate as GLO issues, or indeed as formulated issues to be heard within the case. Thus paragraph 1 seems to propose a preliminary issue as to whether there should be a preliminary issue – that is a case management point, not a GLO issue, and an over-elaborate way of formulating a case management list of issues.

The Central Common Issues in paragraphs 3 to 5, which lie at the heart of the matter, do not properly encapsulate issues which arise in this litigation. Thus:

The question formulated in paragraph 3 does not, as such, arise. The question whether the percentage is “excessive” is not a question under either piece of legislation. That word is a loaded word which imports a number of value judgments which are not set out in the legislation, and are not required by it. No benchmark is provided by the legislation, and the court is highly unlikely to provide one. The test under the legislation requires an assessment of fairness, which is something different.

The question in paragraph 4 is one element of the overall fairness inquiry and is unlikely to arise as such. Capping might be one way in which it might be said that banks could have removed unfairness (if it would otherwise have existed), but it is not necessarily the only way. No doubt the possibility of capping will feature in the debate, but it is not, as such, likely to be a central issue in the manner suggested (or required) by the Appendix 2 terms.

Paragraph 5 raises a question which is likely to arise at some point, but which will not necessarily encompass all issues as to the brochure. If and insofar as individual circumstances are to be taken into account (see below) then the effect of the brochure on an individual will also be relevant.

There is one further factor which I have in mind. Even if it might be appropriate to try to get a determination of fairness, whether prima facie or not, without putting that question in a real factual transactional context, I have to consider the degree of likelihood of that turning out to be possible. It would be a positive disadvantage to this litigation to go through the exercise, make some findings of fact but to decide that the question of fairness cannot, after all, be decided at that stage. There would then have to be a significant hiatus while individual cases were prepared. I would regard that as a highly undesirable outcome. It might be said to be worth risking it if there were a very significant chance that findings could be reached which made the second stage unnecessary. However, I do not think that such a significant chance exists. My present view is that it is much more likely that no useful fairness conclusion could be reached at that stage, for the reasons given above. So if the suggestion is that the claimants would like to “give that a go” and take the risk that it will not work (which, while not articulated in the submissions, is something that I think I detected as part of their thinking) I do not think that the likelihood of a successful outcome is great enough to justify it.

So far I have considered the claimants’ GLO proposals as case management proposals. I need to turn back to the access to justice point taken by Mr Henderson. It would obviously be a concern to the court if it looked as though group litigation were being proposed to be conducted in a manner which meant that the claimants could not avail themselves of it on a funding basis. Part of the process of managing group claims by individuals (whether under a GLO or not) must involve conducting the process in a manner which is fair to them bearing mind that they are individuals and not large institutions with deep litigation pockets. I have borne that firmly in mind.

Nonetheless, that point does not point towards conducting this litigation in the manner proposed by the claimants. Depending on the point at which one enters the equivocation range, the claimants have suggested that they will not proceed with litigation which requires individual circumstances to be brought into the equation because they can or will only fund common interest issues (or what they currently regard as common interest issues). If that is their view then that is a matter for them. However, it would be wrong to allow that view to generate a piece of litigation which is flawed in the manner referred to above. They are not entitled to the litigation they are prepared to pay for. They are entitled to the litigation that it is right to conduct having regard to the interests of both parties and to the proper administration of justice. There is a difference between conducting litigation with a view to the more limited resources of one set of parties on the one hand and allowing one set of parties to dictate the shape of litigation on the footing that if they do not get that shape then they will not join the game. The former presents access to justice issues which the court can address. The latter risks presenting moral blackmail issues which the court will resist.

Accordingly, I do not think that access to justice principles require the adoption of the claimants’ proposals. I am strengthened in this conclusion by two further factors. The first is the equivocation demonstrated in the submissions. The position is not quite as clear as it was first presented to be in oral submissions (as is reflected, inter alia, by the fact that in their skeleton argument the claimants present an Option 2 for the way ahead, which in turn involves taking individual cases, though Mr Henderson said that they envisaged that being possibly done by questionnaire and not live evidence) . The second is that I think that further reflection among the claimants may demonstrate that properly managed litigation involving the consideration of individual circumstances, in the manner outlined below, still presents a prospect of resolving many if not all cases even if deciding their common issues by themselves is not a successful shortcut. It is open to the claimants to make sensible costs sharing arrangements among themselves, and it cannot be beyond the wit of practitioners and judges to devise cost incidence schemes which reflect the common benefit of deciding individual cases. This is not apparently litigation which is being conducted on shoestring finances. I was told that the claimants’ costs (including, presumably, those who have instructed the common solicitors but have not yet started proceedings) already amount to a figure approaching £1m, and the litigation has not yet really got started.

It follows that the proposed GLO fails as a way of resolving the issues in these cases, and it becomes necessary to consider whether an alternative GLO is appropriate or whether there is some other technique for managing these cases. In order to decide this it is useful first to consider the manner in which these cases are most conveniently to be resolved.

As to that, it seems to me that there is one plain common issue, which probably needs to be got out of the way before one embarks on fairness questions, at least under the 1994 Regulations. That is the questions raised by Regulation 3. They apply across the board. If the banks succeed on it there will (as I understand it) be no further question of fairness to be decided under the 1994 Regulations. If they fail, questions of fairness arise under those Regulations, and they arise in any event under the 1974 Act. Fairness questions can best be tackled by taking lead cases, or test cases (depending on one’s preferred terminology). Sample cases can be taken which represent various parts of the spectrum. Technically speaking, the actual findings of unfairness in those cases will not bind other litigants, whether under a GLO or not, but they will doubtless provide guidance for the disposition of a lot, if not all, the other cases. Insofar as they do not lead to agreement on all outstanding cases, then any remaining cases can be dealt with more efficiently by virtue of the material which has already been rehearsed and ruled on in the lead cases.

That being the best way forward, is it appropriate to do that within a GLO? BoS supports the lead case mechanism, and recognises the common issue arising under Article 3, but opposes a GLO. It is said it is unnecessary and unduly cumbersome and expensive. A finding in any given case on Regulation 3 will bind other litigants as a matter of precedent, and a GLO adds nothing to the lead case mechanism. Any stray proceedings commenced elsewhere, which would otherwise be stayed by a GLO, can (so far as they happen at all, which is said to be unlikely) be dealt with by ad hoc stays and transfers. Anything a GLO could accomplish could be accomplished by other, already established, case management techniques. Barclays is more relaxed on the point, and does not oppose a GLO.

I do not accept BoS’s submissions on this point. I thought that they were curious, because it did not seem to me that the cumbersome nature and extra costs were particularly significant in this case, particularly so far as the banks were concerned, until it was pointed out at the hearing that in a witness statement the claimants’ solicitor had said that she would not advise her clients to pursue their claims in the absence of a GLO because they would not have sufficient protection on costs. I thought that that might explain BoS’s attitude. Be that as it may, it seems to me that a GLO remains an appropriate vehicle for the case management of these proceedings. It has some advantages in automatically binding all participants in relation to the genuinely common issues, and provides a useful umbrella for controlling other claims by means of stays. There may be advantages in dealing with costs, too.

Subject to its proving possible to settle the terms of the GLO issues appropriately, I shall therefore provide for a GLO in this case. The GLO issues will be defined in such a way as to describe claims made by borrowers under SAMs against the banks which involve allegations of unfairness under the relevant statutory legislation, and expressly to include the Regulation 3 point. There are certainly related issues of fact there if they are not common. The precise form of wording can be discussed and (I hope) agreed between the parties, but in the event of disagreement I will rule on it. I shall also give directions for the trial of lead cases in order to get the fairness issues decided, and possibly a direction that the Regulation 3 point be taken as a preliminary issue. Again, the parties, having reflected on this judgment, can try to reach agreement on that point, failing which I will rule on it. It is my intention to finalise these things swiftly. I was told that the activities relating to the GLO so far (the original formulation, the hearing before the Master, subsequent extensive dealings on the form of the order and this hearing) have already cost the claimants several tens of thousands of pounds, if not more. That is extremely unfortunate, and that rate of expenditure (which has been incurred before the proceedings have got anywhere) on this sort of issue must not be allowed to continue.

Can a provisional determination (as to whether the Relevant Provisions were unfair (for the purposes of the 1994 Regulations) having regard to the Common Circumstances but before having regard to any Individual Circumstances on which a Defendant or Defendants wishes or wish to rely) enable the court to dispose finally of all claims on the Register more quickly, proportionately and cost-effectively than it could if instead it either (i) tried Issues 3 - 7 and 9, or (ii) managed a limited number of such claims, and conducted individual or consolidated trials of the claims so managed, outside the framework of a GLO?

If the answer to (a) above is ‘yes’, will the court make such a provisional determination?

If the answer to (a) or (b) above is ‘no’, could a determination (as to whether the Relevant Provisions were unfair (for the purposes of the 1994 Regulations) having regard to the Common Circumstances even if the Individual Circumstances alleged to exist in individual cases by the relevant Defendants were proved at trial) enable the court to dispose finally of all claims on the Register more quickly, proportionately and cost-effectively than it could if instead it managed a limited number of such claims, and conducted individual or consolidated trials of the claims so managed, outside the framework of a GLO?

If the answer to (c) above is ‘yes’, will the court make such a determination?

Can a provisional determination (as to whether the relationships between lenders and Borrowers were unfair (for the purposes of section 140A of the 1974 Act) having regard to the Common Circumstances but before having regard to any Individual Circumstances on which a Defendant or Defendants wishes or wish to rely) enable the court to dispose finally of all claims on the Register more quickly, proportionately and cost-effectively than it could if instead it either (i) tried Issues 3 - 5 and 11, or those Issues and Issues 12 - 14, or (ii) managed a limited number of such claims, and conducted individual or consolidated trials of the claims so managed, outside the framework of a GLO?

If the answer to (a) above is ‘yes’, will the court make such a provisional determination?

If the answer to (a) or (b) above is ‘no’, could a determination (as to whether the relationships between the relevant Defendants and the relevant Claimants were unfair (for the purposes of Section 140A of the 1974 Act) having regard to the Common Circumstances even if the Individual Circumstances alleged to exist in individual cases by the relevant Defendants were proved at trial) enable the court to dispose finally of all claims on the Register more quickly, proportionately and cost-effectively than it could if instead it managed a limited number of such claims, and conducted individual or consolidated trials of the claims so managed, outside the framework of a GLO?

If the answer to (c) above is ‘yes’, will the court make such a determination?

Was the percentage of the increase in the value of the property fixed under each SAM Loan Agreement which determines, in whole or in part, the amount payable by the Borrower under the Relevant Provisions, excessive?

Should the amount payable by the Borrower under the Relevant Provisions have been capped or otherwise limited?

Were the Brochures issued in respect of each SAM Loan Agreement, when objectively viewed by a prospective Borrower who was a reasonably well-informed and circumspect consumer, likely to mislead such a prospective Borrower into thinking that the true costs of entering into a SAM Loan Agreement were less than they would be or less than they were likely to be?

Were the Relevant Provisions in plain intelligible language within the meaning of Regulation 3(2) of the 1994 Regulations?

If the answer to Issue 6 is “yes”, do Article 4(2) of Council Directive 93/13/EEC and Regulation 3(2) of the 1994 Regulations have the effect of excluding an assessment of the fairness of the Relevant Provisions sought on the ground that the amount payable by the Borrower under the Relevant Provisions should have been, but was not, capped or otherwise limited?

If the answer to Issue 6 or 7 is “no” and if the answers to Issues 1(a) and 1(b) are “yes”, having regard to the Central Common Issues (to the extent that they are determined at trial in favour of the Claimants):

were the Relevant Provisions unfair (for the purposes of the 1994 Regulations) having regard to the Common Circumstances but before having regard to any Individual Circumstances which are or may be relevant to the question of fairness in individual cases?

if the answer on (a) above is “yes”, are Individual Circumstances capable of rendering the Relevant Provisions fair in individual cases?

if the answer on (b) above is “yes”, what Individual Circumstances are or may be capable of rendering the Relevant Provisions fair in individual cases?

If the answer to Issue 6 or 7 is “no” and if the answers to Issues 1(a) and 1(b) are “no” and to Issues 1(c) and 1(d) are ‘yes’, having regard to the Central Common Issues (to the extent that they are determined at trial in favour of the Claimants):

were the Relevant Provisions unfair (for the purposes of the 1994 Regulations) having regard to the Common Circumstances even if the Individual Circumstances alleged to exist in individual cases by the relevant Defendants were proved at trial?

if the answer on (a) above is “no”, could the court provide any guidance, capable of being applied in relation to individual cases, as to the circumstances in which the Relevant Provisions will or may be held to be, or not to be, unfair (for the purposes of the 1994 Regulations) having regard both to the Common Circumstances and to the Individual Circumstances in individual cases?

if the answer on (b) above is “yes”, what guidance, if any, does the court give?

If the Relevant Provisions were not unfair (for the purposes of the 1994 Regulations) and if the answers to Issues 2(a) and 2(b) are “yes”, having regard to the Central Common Issues (to the extent that they are determined at trial in favour of the Claimants):

were the relationships between the lenders and the Borrowers unfair (for the purposes of Section 140A of the 1974 Act) having regard to the Common Circumstances but before having regard to any Individual Circumstances which are or may be relevant to the question of fairness in individual cases?

if the answer on (a) above is “yes”, are Individual Circumstances capable of rendering the relationship between the lender and the Borrower fair in individual cases?

if the answer on (b) above is “yes”, what Individual Circumstances are or may be capable of rendering the relationship between the lender and the Borrower fair in individual cases?

If the Relevant Provisions were not unfair (for the purposes of the 1994 Regulations) and if the answers to Issues 2(a) and 2(b) are “no” and to Issues 2(c) and 2(d) are ‘yes’, having regard to the Central Common Issues (to the extent that they are determined at trial in favour of the Claimants):

were the relationships between the relevant Defendants and the relevant Claimants unfair (for the purposes of Section 140A of the 1974 Act) having regard to the Common Circumstances even if the Individual Circumstances alleged to exist in individual cases by the relevant Defendants were proved at trial?

if the answer on (a) above is “no”, could the court provide any guidance, capable of being applied in relation to individual cases, as to the circumstances in which the relationship between the relevant Defendant and the relevant Claimant will or may be held to be, or not to be, unfair (for the purposes of Section 140A of the 1974 Act) having regard both to the Common Circumstances and to the Individual Circumstances in individual cases?

if the answer on (b) above is “yes”, what guidance, if any, does the court give?

If the relationship between a relevant Defendant and a relevant Claimant was unfair (for the purposes of Section 140A of the 1974 Act), can the appropriate remedy under Section 140B of the 1974 Act be determined having regard to the Common Circumstances but without reference to the Individual Circumstances in that case or the amount which would be payable by the relevant Claimant under the Relevant Provisions in that case?

If the answer to Issue 12 is “yes”, what is the appropriate remedy under Section 140B of the 1974 Act?

If the answer to Issue 12 is “no”:

could the court give directions or guidance (i) as to the range of remedies which will or may be appropriate under Section 140B of the 1974 Act having regard to the Common Circumstances and (ii) as to how in individual cases the appropriate remedy should or could be identified having regard to the Individual Circumstances in individual cases and (if relevant) the amount which would otherwise be payable by the relevant Claimants under the Relevant Provisions in those cases?

if the answer on (a) above is “yes”, what directions or guidance , if any, does the court give?