English law in consumer contract includes limitation rule: sheriff
A consumer contract which provided that English law was to apply was also governed by English limitation periods, including the six year rule for actions founded on an agreement, in the absence of averments that the contract fell within one of the excepted categories in the Rome Convention, a sheriff has held.
Sheriff Stuart Reid gave his decision in an action in Glasgow Sheriff Court by PRA Group (UK) Ltd seeking payment by Anne-Marie Reilly of £5,258 allegedly due under a credit card agreement. The defender pled that the claim was time barred under the Scots law of prescription, being more than five years old, the date from which time ran being July 2012 and the action having been served on 5 September 2017. It was further argued that to the extent that the contract was governed by English law, in the context of a consumer contract such as this the defender could not be deprived of the protection afforded by mandatory rules of Scots law, which included the short negative prescription.
Repelling the plea of prescription and allowing proof before answer, the sheriff cited the Rome Convention, given effect by the Contracts (Applicable Law) Act 1990, and article 3.1, by which a contract is governed by the law chosen by the parties. While article 5 conferred some protection on a consumer in the context of certain consumer contracts, for which “the mandatory rules” of the consumer's jurisdiction were preserved, the defender had failed to aver that the contract fell within one of the article 5 exceptions, and if so, which, and therefore failed to engage article 5 at all.
Even if she had, the rules on prescription were not among the “mandatory rules” within article 5.2. “Mandatory rules” were those “which can properly be regarded as so fundamental in their nature or purpose as to justify overriding the policy objective of the Rome Convention”, such perhaps as those preventing discrimination. The rationale of the law of prescription was “not easily characterised as a fundamental tenet of Scots law”, Sheriff Reid held. “Nor is it necessarily a policy or rationale that is so intrinsically worthy as to justify over-riding or 'trumping' the equally admirable objective of cross-border harmonisation sought to be achieved by the Rome Convention, specifically to bring uniformity to disparate conflicting international approaches in the determination and recognition of the proper law of contractual obligations.”
The Convention itself also recognised rules of prescription and limitation as within the scope of the applicable law. Further, s 23A of the Prescription and Limitation (Scotland) Act 1973, which recognised foreign limitation rules where foreign law applied, was unequivocal, and could not be taken to have been impliedly repealed by the 1990 Act as argued for the defender.
Sheriff Reid also held that the pursuers had averred enough for proof on a case that time did not start to run in any event until November 2012, when a termination notice was issued by the original creditor.