Shearman & Sterling LLP | FinReg | UK Court Rules on Withholding Identity of Peer-To-Peer Lenders
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  • UK Court Rules on Withholding Identity of Peer-To-Peer Lenders

    The U.K. High Court of Justice has ruled that the identities of the underlying lenders in a series of loans made through a peer-to-peer lending platform should not be disclosed to the claimant borrower. Milne v Open Access Finance Ltd considers a claim brought by a solicitor who took out a series of loans over several years with Open Access Finance, a peer-to-peer lender. The claimant is seeking relief from his obligation to repay the £170,000 worth of loans extended to him, damages for misleading actions contrary to the Consumer Protection from Unfair Trading Regulations 2008, as well as damages under the Financial Services and Markets Act 2000 and relief under the Consumer Credit Act 1974.
    The claimant applied to the court for disclosure of the identities of the 612 underlying lenders that supplied the funds made available to him through Open Access Finance. In coming to its decision, the court considered that a claim involving 612 lenders was at risk of being out of balance, particularly if the lenders were not represented by the same legal team. It also decided that there was sufficient evidence of a common interest between Open Access Finance and the individual lenders, as the claim being brought against Open Access Finance as agent for the lenders was in reality identical to the claim being brought against the individual lenders themselves. This satisfaction of the common interest test enabled the court to determinate that Open Access Finance could act as representative for the lenders without the need for their individual identities to be disclosed.
    View the High Court judgement in Milne v Open Access Finance Ltd.
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