Office of Fair Trading v Lloyds TSB Bank Plc & Ors [2004] EWHC 2600 (Comm) (12 November 2004)

Office of Fair Trading v Lloyds TSB Bank Plc & Ors [2004] EWHC 2600 (Comm) (12 November 2004)

Section 75 of the Consumer Credit Act 1974 applies to four-party credit card transactions because the network of arrangements between issuers and suppliers, though indirect, constitutes 'arrangements between' creditor and supplier within the meaning of the Act. However, section 75 does not apply to foreign transactions where the contract was made wholly outside the UK, governed by foreign law, and goods or services were supplied outside the UK, as Parliament did not intend such extraterritorial effect and practical difficulties undermine the statutory scheme.

Citation
[2004] EWHC 2600 (Comm)
Parties
Claimant: The Office of Fair Trading; 1st Defendant: Lloyds TSB Bank plc; 2nd Defendant: Tesco Personal Finance Limited; 3rd Defendant: American Express Services Europe Limited
Jurisdiction
England and Wales
Judgment Date
12 November 2004
Procedural Posture
Declaratory Proceedings / First Instance Judgment
Outcome
Partially allowed
Legal Topics
Connected Lender Liability, Credit Card Transactions, Statutory Interpretation, Extraterritoriality, Arrangements Between Creditor and Supplier
Consumer Credit Banking Law Contract Law Connected Lender Liability Credit Card Transactions Statutory Interpretation Extraterritoriality Arrangements Between Creditor and Supplier

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Parties

The Office of Fair Trading

Claimant

Lloyds TSB Bank plc

1st Defendant

Tesco Personal Finance Limited

2nd Defendant

American Express Services Europe Limited

3rd Defendant

Procedural Posture

Declaratory Proceedings / First Instance Judgment

Legal Issues

  1. 1 Does section 75 of the Consumer Credit Act 1974 apply to four-party credit card transactions?
  2. 2 Does section 75 apply to overseas (foreign) credit card transactions?
  3. 3 Are there 'arrangements between' the creditor and the supplier in four-party transactions under section 12(b)?

Ratio Decidendi

Section 75 of the Consumer Credit Act 1974 applies to four-party credit card transactions because the network of arrangements between issuers and suppliers, though indirect, constitutes 'arrangements between' creditor and supplier within the meaning of the Act. However, section 75 does not apply to foreign transactions where the contract was made wholly outside the UK, governed by foreign law, and goods or services were supplied outside the UK, as Parliament did not intend such extraterritorial effect and practical difficulties undermine the statutory scheme.

Court Disposition

Partially allowed

Orders

  • Declaration that section 75 applies to four-party credit card transactions under UK law.
  • Declaration that section 75 does not apply to foreign transactions where the contract was made wholly outside the UK, governed by foreign law, and goods/services supplied outside the UK.