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The definition of “debtor” in the Consumer Credit Act 1974 is “plain and unambiguous” Court of Appeal rules

  • United Kingdom
  • Financial services disputes and investigations


The Court of Appeal has handed down its judgment in Janette Cooper v The Freedom Travel Group Ltd (and Bank of Scotland plc t/a Halifax as a proposed defendant/respondent) which considered the definition of “debtor” in section 75 of the Consumer Credit Act 1974 (“CCA 1974”).  The Court of Appeal found that the definition of “debtor” has a “plain and unambiguous meaning, namely the contractual debtor. There is nothing in section 75 which indicates an intention to extend the definition set out in section 189 to include third party beneficiaries of the credit extended under the agreement.”

Blake Morgan LLP represented the appellant, Mrs Cooper.  Eversheds Sutherland (International) LLP represented the Respondent, Bank of Scotland Plc t/a Halifax. 


1. The appellant’s husband, Mr Cooper, has a credit card with Bank of Scotland Plc t/a Halifax (“Halifax”) provided under the terms of a credit card agreement regulated by the CCA 1974 (“the Agreement”). Mr Cooper was the only card-holder under the Agreement.   Mrs Cooper was not a party to or an additional card-holder in respect of the Agreement.

2. In October 2014, Mr Cooper entered into a contract with Freedom Travel Group Ltd (“FTG”) for a ten-day package holiday to Greece in May 2015 (“the Holiday Contract”). The confirmation invoice for the Holiday Contract was addressed to Mr Cooper as the contracting party.  Mr Cooper used his credit card to pay the deposit of £499.80 and later paid the balance by other means.  Mr Cooper was the “principal contractor” for the holiday within the meaning of the Package Travel Regulations 1992 (“the PTRs”) and the Package Travel Directive (Council Directive 90/314/EEC of 13 June 1990) (“the Directive”).

3. Whilst on holiday in May 2015, Mrs Cooper fell and she suffered a fracture of the left leg which required surgery. On her return to the UK, she brought a claim for compensation against FTG under the PTRs.  The claim against FTG was issued on 28 March 2018. In September 2019, shortly before the case was listed for trial, FTG went into liquidation.  The claim was stayed on 19 October 2019.

4. Mrs Cooper made an application to add Halifax to the proceedings under CPR r.19.5, by seeking to rely on section 75 of the CCA 1974.  On 21 April 2020 the Deputy District Judge dismissed Mrs Cooper’s application holding that (i) Mrs Cooper could not bring a claim under section 75 as she was not a “debtor” within the meaning of the CCA 1974 and (ii) the primary limitation period under section 11 of the Limitation Act 1980 would not be disapplied as the respondent was prejudiced by the admission of liability by FTG.

5. Mrs Cooper’s appeal to a circuit judge in the County Court was dismissed, so she made a second appeal to the Court of Appeal.

Mrs Cooper’s case

6. Mrs Cooper’s case throughout the appeals has been:

6.1. That whilst she did not have a credit agreement with Halifax, she was a “debtor” within the meaning of the CCA 1974. Her primary case is that such an interpretation follows from the natural meaning of the words in section 189 but failing that, the same result flows from an interpretation of section 75 which is both purposive and consistent with EU law.

6.2. The effect of section 75 is to override privity of contract. The removal of privity should be interpreted extensively so as to encompass within the meaning of “debtor” anyone who has a claim in breach of contract against the supplier.

6.3. If section 75(1) were intended to exclude the appellant, it could have stated that it is only a contractual debtor who obtains the benefit of a credit agreement.

6.4. That she is deemed to have a contractual claim against the supplier under the PTRs as she is a “consumer” as set out in Regulation 2(2).

6.5. That the PTRs provide a right by statute to bring a claim in contract as a consumer in accordance with the Directive.

6.6. Following the Marleasing principle, domestic law must be interpreted harmoniously with European law.

6.7. The CCA 1974 must be interpreted in the light of the wider definition set out in the 1992 Regulations to ensure consistent interpretation of domestic legislation with European law and to give effect to the Directive’s aims.

Rationale for dismissing the appeal

7. The Court unanimously dismissed the appeal.  The rationale, taken from the Judgment, is as follows:

7.1. The attention to detail exhibited by the draughtsman is seen in the use of strictly defined terms in part 2 of the CCA 1974, in particular the inclusion of a collection of specific definitions in section 189. [30]

7.2. It is clear that the receipt of “credit” is not simply having the benefit of funds.  It is having the contractual right to defer repayment of the debt, hence the phrase used by the appellant, “contractual debtor”.  [33]

7.3. The narrowness of the definition of “debtor” is consistent with other statutory definitions in the CCA 1974 for example “credit” and “consumer credit agreement”.  It is of note that within the Act, any wider interpretation of “debtor” other than that contained in s.189 is expressly stated (para 23 above).  No such expansion is contained in section 75.  [34]

7.4. If such a definition were to be expanded beyond the strict confines of section 189, and section 75 was interpreted so as to include a third party beneficiary, it is not difficult to envisage the practical and legal difficulties of any creditor to a credit agreement.  [37]

7.5. Having considered the relevant provisions of the CCA 1974, I conclude that the word “debtor” in section 75 has a plain and unambiguous meaning, namely the contractual debtor.  There is nothing in section 75 which indicates an intention to extend the definition set out in section 189 to include third party beneficiaries of the credit extended under the agreement.  Further, I do not accept the appellant’s contention that the effect of section 75 is to override privity of contract.  The reference to “any claim against the supplier in respect of …. breach of contract” in section 75 is clearly qualified by the preceding words of s.75(1) namely “If the debtor under a debtor-creditor-supplier agreement … has, in relation to a transaction financed by the agreement …”.  The “claim” is limited to the contractual debtor under the credit agreement. [38]

7.6. As to a claim by the appellant pursuant to the 1992 Regulations, I accept the respondent’s contention that such a claim is not a claim for a breach of contract but rather a statutory claim under the regulations by a non-contracting party. [41]


The construction contended for on behalf of Mrs Cooper would have resulted in some absurd consequences given a creditor’s obligations around providing notices, information and statements to debtors as set out under the CCA 1974, which the Court of Appeal recognised.  For anyone in doubt as to who is included in the term “debtor”, there is now clear authority from the Court of Appeal on who can bring a claim under section 75, and the plain definition of a “debtor”.