Notes from hearing 30.01.26: the unfair relationship test (S140 A-C CCA 1974), the only thing a claimant needs to prove

30 Jan

Written By Laurie Noah

What a Claimant MUST Prove (and what they DON'T need to prove)

The claimant does NOT need to prove:

fraud
misconduct
breach of duty
that they paid the commission
that the lender acted illegally
that they suffered financial loss
that the dealer was a fiduciary
that they understand commission structures

None of this is required.

The claimant ONLY needs to prove ONE thing:

1. That there is something capable of making the relationship “unfair”.

That’s it.

This is a very low threshold.

Examples include:

a commission was not properly explained
the claimant didn’t know the amount of commission
the paperwork was confusing
the claimant trusted the dealer to act in their interest
the terms were unclear or rushed
important information was hidden in fine print
the claimant was young or inexperienced
the dealer had incentives that were not disclosed
internal rules (e.g., BMW tactical documents) weren’t followed
the claimant did not read or understand part of the agreement
the finance was sold in a high‑pressure environment

ANY of these can trigger the court’s power under s140A.

Once the claimant raises such a concern:

The burden SWITCHES to the lender (this is the most important part).

Under s140B, the lender must prove the relationship was fair.

This is what makes s140A so powerful.

The court asks:

Did the lender prove fairness?
Did they prove the customer understood?
Did they prove the commission did not distort the deal?
Did they prove that the process was transparent?

If the lender fails to prove fairness → the claimant wins.

So what does “raising unfairness” actually look like?

Here are the most common, simple ways a claimant can meet their burden:

1. Saying they did not know about the commission.

Even if they later learned it through a solicitor.

2. Saying the commission would have mattered to them.

(e.g. “I wasn’t earning much at 25, so knowing about it would have changed how I felt about the cost.”)

3. Saying they trusted the dealer to get them a good deal.

4. Saying they didn’t understand certain documents.

5. Saying the deal felt rushed or unclear.

All of these are enough to shift the burden to the lender.

What the court will NOT expect from a claimant

Judges know that consumers:

don’t understand commission structures
don’t read small print
don’t remember technical details
rely on sales staff
can’t explain how finance is calculated

This is normal.
It does NOT weaken the claim.

In fact, in many cases (as you observed in your hearing), the claimant’s confusion actually helps prove unfairness, because it shows they were not given meaningful disclosure.

What the Lender Must Prove (the hard part)

Once unfairness is raised, the lender must prove the opposite:

that disclosure was clear
that the claimant meaningfully understood
that the commission did not distort the deal
that internal rules were followed
that the dealer was transparent
that the claimant was not disadvantaged
that the rate was fair even in context
that the relationship as a whole was balanced

In practice, this is very difficult.

Laurie Noah