Proceed with caution

Up to 100,000 claims for the cancellation of credit card and other debt have been stayed pending a test case.

Many of the claims have been generated through adverts by claims-handling firms, who argue debts can be written off where credit agreements are not compliant with the Consumer Credit Act 1974.

However, Judge Derek Halbert indicated last week that a few claims would be selected as test cases for consideration of the commercial court, and all other claims stayed.

Daniella Lipszyc, a solicitor who specialises in financial irregularity cases at Ultimate Law, says it was “inappropriate and misleading for any company to promise to write off balances in light of this judicial move”. She urges lawyers to steer clear of credit enforceability claims, saying they would be unlikely to win or receive costs: “While many claims management companies believe this area is lucrative and ‘sexy’, I’ve always had extremely grave reservations about entering into this sector and have always advised any solicitor who is considering a move into this market to do so with extreme caution.”