Connected lender liability: a narrower construction of “arrangements”

On 10 October 2022, Mr Justice Lavender handed down the High Court’s judgment in Steiner v National Westminster Bank plc [2022] EWHC 2519 (KB). The case concerned the meaning of the word “arrangements” in section 12(b) of the Consumer Credit Act 1974 (the CCA) and arose where the recipient of the payment was different to the supplier.

Mr Steiner had used his NatWest credit card to pay for a timeshare agreement with Club La Costa (who was the supplier for the purposes of the CCA). However, the credit card payment was not taken by Club La Costa but was taken by First National Trustee Company (FNTC). Ms Steiner, acting as the personal representative of her late husband’s estate, brought the claim against NatWest under sections 56, 75 and 140A of the CCA. In order to engage connected lender liability under those sections, Ms Steiner needed to establish that the credit agreement fell within section 12(b) CCA and was made “under pre-existing arrangements, or in contemplation of future arrangements” between NatWest and Club La Costa.

In Office of Fair Trading v Lloyds TSB Bank plc [2007] QB 1 the Court of Appeal held that there were the necessary arrangements between creditors and suppliers who belonged to the same credit card network, even if there were no direct arrangements between them (due to the interposition of merchant acquirers). However, in the present case, it was FNTC, and not Club La Costa, who was a member of the credit card network. Ms Steiner, therefore, needed to establish that there were the necessary arrangements between Club La Costa and NatWest. She argued that arrangements existed because there was a Trust Deed between Club La Costa and FNTC and the money paid to FNTC would have been passed on to Club La Costa. This question was tried as a preliminary issue at first instance, with His Honour Judge Freedman finding in favour of NatWest and dismissing the Claim. Ms Steiner appealed.

The High Court also found for NatWest and dismissed the appeal. Mr Justice Lavender considered that a significant feature of the factual scenario addressed in Office of Fair Trading v Lloyds was that the parties in that case were all subject to the same network (Mastercard). That network constituted “arrangements” between its members (either “existing” if the supplier is already a member at the time of the agreement or “future” if the supplier joined the network after the credit card provider).  However, having carefully considered all of the arguments advanced, Mr Justice Lavender did “not consider that the words of the section [12(b) of the CCA] can properly be stretched so far as to mean that NatWest made its agreement with Mr Steiner under the Trust Deed (of which it was presumably unaware) as well as under the Mastercard network.

The full judgment can be read here: Steiner v NatWest [2022] EWHC 2519 (KB) (

The decision will make welcome reading for credit card providers facing claims and complaints where the supplier does not directly take the credit card payment. Card issuers will now be able to argue against a wider interpretation of “arrangements”.

DMH Stallard acted for NatWest.

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James Colvin


Expert in commercial and banking disputes involving issues of negligence, misrepresentation, breach of fiduciary duty and shareholder disputes.

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