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Debt advisers subject to judicial review?
The judgment in Kaye v Lees (No 3) [2023] EWHC 758 (KB) is worth noting if you or colleagues are involved in granting debt ‘breathing space’ moratoria.
The facts of the case are not particularly important to the point I want to make. Basically the creditor’s attempts to enforce a judgment had been repeatedly frustrated by the debtor’s entry into a series of ‘breathing spaces’ which were, to put it neutrally, dubious. The court had previously made an injunction preventing the debtor from entering into any further breathing space and this had been sufficient to allow the creditor to take the enforcement action proposed. The creditor had however sought for the injunction to be continued beyond that point, for fear of some further breathing space impeding him in some way. The court refused to extend the injunction.
But of rather more general concern is the indication at the bottom of the judgment (para 52-54) that a debt adviser’s decision to put a client into a ‘breathing space’ could be something which could be challenged under judicial review in an appropriate case, and that a debt advice provider such as a CAB or other charity could face the prospect of defending its decision on public law grounds, which is probably not something that they are really set up to do. The implication of this is then that the creditor would expect to recover their legal costs from the debt advice provider, rather than the debtor, if the claim was successful.
I don’t know what steps are currently taken by debt advisers in justifying their decisions regarding breathing spaces, or even whether this obiter reasoning would be likely to hold up but this is a clear steer that the reasoning needs to be set out with a public law challenge in mind…
https://www.bailii.org/ew/cases/EWHC/KB/2023/758.html
https://www.rightsnet.org.uk/debt/caselaw/item/high-court-refuses-to-extend-injunction-preventing-debtor-from-seeking-repeat-mental-health-crisis-moratorium-ruling-that-creditor-did-not-have-interest-that-merits-protection