The Equality Act 2010 can be a significant consideration, but it is rarely a complete defence on its own. The key is to identify precisely how the lender's conduct amounts to unlawful discrimination and what remedy follows.
A useful way to analyse the case is to ask the following questions.
- Does the borrower have a disability?
Under section 6 of the Equality Act 2010, the borrower must have:
- a physical or mental impairment; and
- the impairment must have a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities.
Medical evidence is usually required.
- Did the lender know, or ought it reasonably to have known, about the disability?
A lender cannot usually be liable for a failure to make reasonable adjustments if it had no actual or constructive knowledge of the disability.
Evidence might include:
- medical reports previously supplied;
- correspondence mentioning the condition;
- communications from support workers or solicitors;
- obvious signs of impairment during interactions.
- What reasonable adjustments should have been made?
This is where many lenders are vulnerable. Examples include:
- communicating through a representative where appropriate;
- allowing additional time to respond to correspondence;
- providing information in an accessible format;
- ensuring staff dealing with the case understand the customer's vulnerabilities;
- considering alternative repayment arrangements before commencing possession proceedings.
The Equality Act does not require a lender to write off the debt or refrain indefinitely from enforcing its security. The adjustments must be "reasonable."
- Was there discrimination arising from disability?
Section 15 of the Equality Act may be particularly relevant.
Suppose:
- the borrower suffers severe depression;
- the depression causes missed payments;
- the lender seeks possession because of those missed payments.
The missed payments may constitute "something arising in consequence of" the disability. The lender must then justify its treatment as a proportionate means of achieving a legitimate aim. This is a fact-sensitive balancing exercise.
- Is there indirect discrimination?
A lender's standard policy may disadvantage disabled borrowers. If so, the lender must objectively justify the policy.
- FCA obligations
The FCA's Consumer Duty and its expectations regarding vulnerable customers are often overlooked. A lender should identify and respond to customer vulnerability, communicate effectively, and provide appropriate support. A failure to do so may not itself create a private cause of action, but it can be persuasive evidence when challenging the lender's conduct or seeking to negotiate a resolution.