NRAM plc v McAdam and another – Court of Appeal hand down its ruling in controversial consumer credit case

Posted by Richard Humphreys on

Background and First Instance ruling

This case concerned a dispute over whether the rights and protections afford by the Consumer Credit Act 1974 (CCA) could be implied into a normal (unregulated) contractual relationship by conduct despite the relationship between the consumer credit provider and recipient of consumer credit ordinarily failing to satisfy the requirements of a regulated consumer credit contract. The first instance judged erred that it could which shocked many within the consumer credit industry.

NRAM appealed the High Court’s ruling.

For a breakdown of the background and substance of the High Court ruling, please read our earlier article here. 

The Court of Appeal

The CA granted NRAM’s appeal on the following basis:

  1. The CCA is highly technical and is generally prescriptive in nature. The CCA contains a provision that gives the court power to enforce an agreement meaning that simply importing the CCA into an agreement is not possible.  The CA suggested that for the CCA to be implied into a contract express and clear wording must be used; this was not the case with NRAM and therefore the CCA was not implied into the contract;
  2. The loan documentation stated that it was "regulated by" as opposed to “incorporated into”. This was a statement of fact rather than a word of incorporation.  CCA was not incorporated by way of the wording using in relevant customer contracts; and
  3. The wording in the contract did not mean NRAM had expressly or implicitly agreed to allow the borrower to have some or all of the protections of the CCA..

The CA stated that whilst the CCA had not been incorporated into the contracts of concern and therefore the respondents were not entitled to the benefit of any aspect of the CCA. They might still be entitled to remedies for breach of contractual representation/ warranty because that is all that the wording amounted to. The remedy here  may be restricted because the breach would have to have occurred at the time the borrower entered into the credit agreement.


This ruling will be welcome by many consumer credit providers as it allows a margin of error in situations where the application of the CCA has gone slightly awry. If the first instance decision was upheld it could have meant consumer credit providers paying out huge sums to those who were never supposed to have been able to take advantage of the protections under the CCA.

About the Authors

Specialising in CCA compliance and FCA regulatory advice, Richard is a partner in Blake Morgan's Financial Services group.

Richard Humphreys
Email Richard
01865 254243

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Specialising in financial services regulation, Felicity advises regulated firms and Approved Persons, private individuals and businesses on financial services issues.

Felicity Rowan
Email Felicity
020 7814 6877

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