Explained
Breathing Space
more scope for moratorium debt challenge
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A recent High Court verdict provides much-needed clarity in relation to the Breathing Space Regulations and confirms the court’s jurisdiction to review a debt adviser’s decision
his is the first appeal decision of the High Court on the complex and far-reaching Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020. Perhaps reflecting the labyrinthine nature of the regulations, the appeal was listed for a two-day hearing. A third day then had to be found to deal with further points about the interpretation of the regulations that could not be resolved in the two days available. The appeal was from the decision of Her Honour Judge Baucher, made at a hearing on 4th January 2024. The Breathing Space Regulations allow a debtor to obtain the benefit of a moratorium in respect of all their debts that are not exempted under the regulations. They give debt advice providers various functions in relation to this process, including the power to determine, as a matter of law, which debts are eligible to be included within a moratorium. The regulations allow lenders to challenge the decision of a debt advice provider within strict time limits and in accordance with a specific process set out in them. HHJ Baucher held that this was the only way to challenge a debt advice provider’s decision and that, if a lender missed the deadline for doing so, they were stuck with the decision regardless of whether the debt adviser had got the law right.
Words by
DAVID SMITH
Partner; and Neli Borisova, associate in the London property litigation team at JMW Solicitors; as well as Tom Morris, barrister at Landmark Chambers
Bridging & Commercial
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