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Wilson v First County Trust Ltd No.2, Court of Appeal, 2 May 2001

8 May 2001
The issues

Debt owed to First County

The facts

You may recall that Mrs Wilson tried to get out of a debt owed to First County. In doing so the bank relied at the last minute on provisions of the Human Rights Act and in respect of the draconian effects of Section 127. When this matter arose in the Court of Appeal the case was adjourned to allow the Secretary of State to make representation with regard to whether or not a declaration of incompatibility should be made.

The decision

It was argued by the Treasury’s solicitor that the Court had no power to make a declaration of incompatibility since the making of the regulated agreement took place before the 1988 Act came into force. However, the Court took the view that the relevant date was not the date of the agreement but the date on which the matter came before the Court for the Court to make an Order since it had after Section 6(1) to refrain from acting in a way incompatible with a convention right (this if I remember correctly was exactly the point taken by Peter Groble in his lecture last year).

The effects of Section 127 and Section 65 of the Consumer Credit Act was to deprive the Defendant of his ability to enjoy benefits from its contractual rights arising from the agreement. It favoured a “mechanistic approach” i.e. did the document contain all the prescribed terms. The policy aim – protection of the consumer – was legitimate. The means by which the aims achieved was not legitimate. The prohibition was inflexible. There was no reason why such a prohibition should be inflexible to achieve the policy aim. “It could be achieved through judicial control, by empowering the Court to do what was just in a particular case”. It was not possible to read or give effect to the relevant provisions to the 1974 Act in a way that was compatible with convention rights and in the circumstances it was appropriate to make a declaration of incompatibility.

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