Richard Durkin wins 16-year laptop credit wrangle with HFC bank
A man has won a 16-year dispute over a laptop which he bought from the Aberdeen branch of PC World.
Richard Durkin claimed the HFC bank ruined his credit rating after he tried to pull out of a credit agreement when he returned the £1,499 computer.
Mr Durkin, 44, took his case to court and initially won damages of £116,000 but that ruling was overturned.
Today's judgment is a significant victory for consumers, but rather a hollow one for Richard Durkin.
The judgment establishes that if you buy goods using a credit agreement, and then validly terminate the contract of sale by rejecting the goods, you can also validly end the credit agreement.
More significantly, it establishes that any lender who wants to blacklist a consumer's credit rating, when they are asserting that they've terminated the credit agreement, owes that consumer a duty of care to ensure that they are genuinely in default of the credit agreement.
Mr Durkin had told HFC bank that he'd ended the credit agreement.
The court found that, in the light of that, HFC were under a duty to make the appropriate enquiries to establish if he had. They did not do so.
Mr Durkin had originally been awarded £116,000 in damages, but that sum was dramatically reduced on appeal at the Court of Session in Edinburgh.
Sadly for Mr Durkin, the Supreme Court in this type of appeal is unable to reassess the damages in the case, and so he was left with just £8,000.
However, his legacy will perhaps be that banks and others extending credit to purchase goods under what are known as 'debtor, creditor, supplier' agreements will have to be exceptionally careful before informing credit agencies that the customer is in default.
If they get it wrong and are negligent, they can be sued by the customer.
The Supreme Court in London has now allowed his appeal and ruled he should receive £8,000 in damages.
Mr Durkin said the ruling was a victory for the consumer but a blow for him personally.
He had handed over £50 and signed a credit agreement with HFC in 1998, but said he was told by a sales assistant at the store in Aberdeen that the laptop could be returned if it had a problem.
He discovered the laptop did not have an inbuilt modem.
Mr Durkin was eventually paid back the £50 by PC World but HFC said he was still required to make payments under the terms of the credit agreement.
In 2008 Aberdeen Sheriff Court ruled that he was entitled to reject the laptop and cancel the sale and the credit agreement and awarded damages of £116,000.
The decision was overturned later by judges at the Court of Session in Edinburgh after Mr Durkin himself appealed against the size of the damages.
Delivering the Supreme Court conclusion, Lord Hodge ruled: "I would allow the appeal and declare that Mr Durkin was entitled to rescind and validly rescinded the credit agreement by giving notice to HFC in about February 1999.
"Damages resulting from HFC's breach of its duty of care are confined to injury to Mr Durkin's credit in the sum of £8,000.
"I would give the parties an opportunity to agree the date from which interest should run and the rate or rates of interest to be applied."
Lord Hodge said the Supreme Court did not have the power to restore the damages originally awarded to Mr Durkin.
Mr Durkin said: "I am disappointed that the Supreme Court was unable to restore to me the full damages awarded by the sheriff - even though it was clear that they were sympathetic to my position on this.
"This decision is a great victory for all consumers and I am proud to have been the driving force behind it.
Richard Durkin is far from victorious today.
In the kitchen of his modest terraced house in Aberdeen he shook his head repeatedly as he watched the Supreme Court judgment.
This battle has dominated 16 years of his life and the stress it has caused him is clear in his eyes.
Mr Durkin directs his anger at PC World, HFC bank and the justice system.
He says he is "a quarter of a million pounds down," and the award of £8,000 will make little difference to him.
Above all he says he is struggling to understand how the Supreme Court can rule in his favour and yet fail to right the wrongs of his case.
"As a result of the decision, no consumer will have to endure again what I had to put up with - the loss of the ability to buy a family home because of wrongful blacklisting of me."
He added: "Taking a case to any court is a huge stress, but taking it to the highest court in the land with all the risks that go with it was the most stressful thing that anyone could voluntarily put themselves through.
"But sometimes you have to do what is right, and not what is easy."
Mr Durkin said: "I am grateful to my legal team, and to the Law Society of Scotland who funded the court fees which I could not afford.
"But I am most grateful for an end to this matter now, having fought a long and difficult battle which at last is over."
A statement from HSBC - which now owns HFC - said: "We note the court's judgement and are pleased that this matter has finally been resolved."
Lawyers for Which? magazine are assessing the ruling and its possible implications for consumers.