In a significant judgment on the law of limitation, in Canada Square Operations Ltd v Potter  UKSC 41, the Supreme Court has provided helpful clarification on the meaning of the terms "deliberate" and "conceal" in section 32 of the Limitation Act 1980, which have the effect of postponing statutory limitation periods, concluding that:
- "conceal" means to keep information secret, either by taking active steps to hide it or by failing to disclose it, whether there is an obligation to disclose or not; and
- "deliberate" is akin to "intentional", and does not include recklessness.
In holding that these terms should be given their ordinary meaning, the Supreme Court has potentially widened the scope for claims to be brought more than six years after the cause of action arose, albeit making the task of proving deliberate concealment more challenging.
The underlying case related to commissions earned in respect of a payment protection insurance (PPI) policy. In July 2006, Mrs Potter took out a regulated fixed-sum loan with Canada Square Operations (CSO) for around £17,000, and paid an additional fee of around £3,834 for a PPI policy. Mrs Potter was not informed that more than 95% of the £3,834 fee was taken by CSO as commission for procuring the PPI policy, with only £182.50 actually paid to the insurer.
Mrs Potter repaid the loan in March 2010 and at that point the agreement came to an end. Just four years later, the Supreme Court gave its judgment in Plevin v Paragon Personal Finance Ltd  UKSC 61, concluding that the non-disclosure of a very high commission charged to a borrower constituted an "unfair" relationship for the purposes of section 140A of the Consumer Credit Act 1974. That judgment provided recourse for affected purchasers of PPI, but such claims are subject to a six-year limitation period, with time starting once the credit relationship has ended.
In April 2018, over eight years after the loan agreement came to an end, and twelve years after taking out the loan and purchasing PPI, Mrs Potter complained to CSO that the PPI policy had been mis-sold to her. She received £3,160 in compensation, which did not cover all of the loss she had suffered. In December 2018, relying on the Consumer Credit Act 1974, Mrs Potter issued proceedings to recover the balance of the premium, plus interest. CSO defended the claim on the basis that it had been brought more than six years after the relationship between the parties had ended. Mrs Potter did not dispute that the relevant limitation period was six years, but, relying on section 32 of the Limitation Act, contended that the limitation period did not commence until November 2018. Section 32 provides that:
- where any fact relevant to the claimant’s right of action has been "deliberately concealed" from them by the defendant, the commencement of the limitation period is postponed (s.32(1)(b)); and
- for the purposes of section 32(1), 'deliberate concealment' includes the "deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time" (s.32(2)).
The County Court found for Mrs Potter and held that section 32 applied. CSO's appeals to the High Court and the Court of Appeal were unsuccessful (see our previous article on the Court of Appeal's decision). CSO then appealed to the Supreme Court, asking it to clarify the meaning of:
- "deliberately concealed" for the purpose of s.32(1)(b); and
- "deliberate commission of a breach of duty" for the purpose of s.32(2).
The Supreme Court's decision
Criticising the Court of Appeal for adopting an elaborate and confusing analysis of section 32(1)(b), the Supreme Court rejected earlier jurisprudence that "concealment" required some obligation of disclosure. Noting that "concealer" is used without any obligation to reveal skin blemishes, and that Samuel Pepys "concealed" the information in his diary by writing it in code, even though he was under no obligation to reveal what he had written, the Court found, very simply, that the verb "to conceal" means "to keep something secret, either by taking active steps to hide it, or by failing to disclose" and that "[a] person who hides something can properly be described as concealing it, whether there is an obligation to disclose it or not".
As to the word "deliberately", the Supreme Court concluded that it meant that the concealment must in all cases be intentional, whether effected by positive steps or by the withholding of information. Notably, recklessness was insufficient for section 32(1)(b), in part, because the notion of 'deliberate' concealment was predicated on the (now rejected) understanding that a defendant must be aware of their duty to disclose.
By intentionally omitting to inform Mrs Potter about the commission it had received as part of procuring the PPI policy on her behalf, CSO had "deliberately concealed" facts that were relevant to Mrs Potter's right of action. The effect of the deliberate concealment was that the limitation period commenced in November 2018 when Mrs Potter became aware of the relevant facts, meaning that her claim was not time-barred.
It was not in question that there was an unfair relationship (within the meaning of section 140A of the Consumer Credit Act 1974) between CSO and Mrs Potter which amounted to a breach of duty by CSO for the purposes of section 32(2) – such breach of duty had already been established. The live issue before the Supreme Court was simply whether that breach of duty was "deliberate" for the purpose of section 32(2) where a person was reckless as to its commission by being aware of a risk of a breach and in the circumstances, taking that risk unreasonably.
Employing the same approach to the ordinary meaning of the words used in the legislation, and noting that as a matter of ordinary language, "deliberate" and "reckless" have different meanings, the Supreme Court ruled that section 32(2) only applies to assist a claimant where a defendant knowingly or intentionally commits a breach of duty, and does not extend to recklessness.
In the case of Mrs Potter, it had not been shown that CSO knew or intended that its failure to disclose the commission to Mrs Potter would render their relationship unfair within the meaning of section 140A of Consumer Credit Act 1974. CSO's breach of duty was therefore not deliberate and so Mrs Potter could not rely on section 32(2) to postpone the commencement of the ordinary six-year limitation period. However, as Mrs Potter had already succeeded in extending the time limit by virtue of section 32(1)(b), CSO's appeal was dismissed.
What does this mean for claimants?
With regard to purchasers of PPI, in some respects, the Supreme Court's judgment represents a narrowing of the gateways to redress. In particular, the exclusion of acts of 'reckless' concealment may make it harder for claimants to establish that relevant facts were concealed, if seeking to rely upon section 32(2). However, the effect of the decision of the Supreme Court is also to broaden the scope of section 32(1)(b) to include circumstances where there is no duty to disclose relevant facts, such that potential claimants, including those whose agreements concluded prior to section 140A of the Consumer Credit Act 1974 coming into force, may now find themselves in a stronger position with regard to extending the limitation period. Nevertheless, claimants should bear in mind that they will also need to show that they could not "with reasonable diligence" have discovered facts relevant to a concealed, unfair commission (section 31(1)(b) of the Act). Following a significant media interest and a high profile FCA campaign, one must wonder how many claimants would now be able to establish that they have been reasonably diligent in seeking to discover facts relevant to, as yet, unpursued claims.
The Supreme Court's judgment will also be relevant in wider contexts, and will open a gateway to the pursuit of claims where relevant facts have been withheld notwithstanding the lack of an express duty of disclosure.