Canada Square Operations Ltd -v- Potter: Deliberate Concealment and Recklessness Clarified

A recent landmark decision of the UK Supreme Court has provided much needed clarity to a difficult subject. The case of Canada Square Operations Ltd v Potter [2023] UKSC 41 considered the meaning of the terms “deliberately” and “concealed” and additionally, whether “deliberately” also means “recklessly”.

Background

Mrs Beverley Potter entered into a loan agreement with Canada Square in July 2006 and took out Payment Protection Insurance (PPI) to cover repayments under the loan. Mrs Potter paid £3,834.24 for the PPI policy and a significant portion of the premium (£3,651.74) was paid to Canada Square as commission. The amount received by the PPI insurer was a mere £182.50. Mrs Potter was unaware of this until November 2018. In December 2018, she issued a claim against Canada Square, to recover the sums that she had paid under the policy on the basis that the failure to disclose the commission rendered the relationship unfair under section 140A of the Consumer Credit Act (CCA). While Canada Square admitted that it withheld the relevant information concerning the commission from Mrs Potter, it argued that the claim was time-barred under S.9 of the Limitation Act 1980 as the claim was initiated after the expiry of the 6-year time limit. Mrs Potter argued that the limitation period had been extended under S.32 of the Limitation Act 1980 due to Canada Square’s “deliberate concealment” of the details surrounding the PPI commission.

The Law

The equivalent legislation applicable to Northern Ireland is the Limitation (Northern Ireland) Order 1989. Specifically, S.71 “Postponement of time limit: fraud, concealment or mistake” is relevant when establishing deliberate concealment. Subsection 1(b) sets out that time does not begin to run for the purposes of limitation until the plaintiff has discovered that any fact relevant to their right of action was deliberately concealed from them by the defendant. The onus is on the plaintiff to demonstrate that the relevant fact has been concealed.

For a fact to be “deliberately concealed” in the context of S.71(1)(b), “the result of the act or omission, [i.e., the concealment] must be an intended result”. In this case, where the plaintiff is alleging deliberate concealment of facts, she is required to show:

• a fact relevant to her right of action,
• the concealment of that fact from her by the defendant, either by a positive act of concealment or by a withholding of the relevant information, and
• an intention on the part of the defendant to conceal the fact or facts in question.

The Supreme Court decided that a fact is “concealed” if it is withheld and kept secret from the plaintiff, either by taking active steps or failing to disclose it, whether there is an obligation to disclose it or not. A concealment is “deliberate” if the defendant ensures that the plaintiff does not know the fact in question, such that the plaintiff does not know to bring the claim. All that is required is for the defendant to knowingly intend to conceal the fact. The Supreme Court disagreed with the previous decision by the Court of Appeal that recklessness is sufficient to satisfy S.71(1)(b). The Supreme Court decided that the terms “recklessly” and “deliberately” have different meanings both in law and in language.

Mrs Potter asserted that Canada Square had deliberately concealed the facts of its commission. The Supreme Court held that the term “deliberate concealment” meant that Canada square had “kept a secret” from Mrs Potter. Canada Square admitted that it had not disclosed the fact that it would receive commission. The Supreme Court held that Mrs Potter was therefore entitled to proceed, meaning that her claim was not time-barred.

Final Thoughts:

As established above, a plaintiff must prove that there had been deliberate concealment, of a fact relevant to the right of action, by the defendant. The case also clarifies that “deliberately” does not mean “recklessly”. The test as to whether conduct has been deliberate is straightforward and it is not necessary or sufficient to prove recklessness on the part of the defendant. It was decided that “the plain words of the statutory requirements, ‘deliberately concealed’ and ‘deliberate commission of a breach of duty’ need no embellishment.”

Concealment is often a defence used to contest limitation issues in the context of professional negligence claims to defeat claims that are out of time. This case will make it more difficult for plaintiffs to bring time-barred cases on the grounds contained in S.71 of the Limitation (Northern Ireland) Order 1989 because they will now have to show that the defendant deliberately concealed the relevant information on which the plaintiff has based their claim - the onus is on the plaintiff.

If you would like any further information or advice, please contact Rebecca Kelly from our Professional Negligence team.

*This information is for guidance purposes only and does not constitute, nor should be regarded, as a substitute for taking legal advice that is tailored to your circumstances.