Barclays Bank UK v Terry and the previously hypothetical “bifurcated process”

A recent High Court decision in favour of Barclays Bank (Barclays Bank UK Plc v Terry [2023] EWHC 2726 (Ch)) has sparked intrigue in the field of representative actions. As the first judgment to adopt a ‘bifurcated process’, it represents a move towards split decision-making on ‘common’ and ‘individual’ issues of the class of litigants.

What was the case about?

The factual background involved Barclays accidentally discharging over 5,000 mortgages from the Land Registry in error despite those mortgages still having outstanding balances. This mistake occurred while undertaking an audit of their security at the Land Registry.

Applying the law of rescission of a non-contractual voluntary disposition on grounds of mistake, summarised in Kennedy v Kennedy [2014] EWHC 4129, the Court found that Barclays had made an honest and serious mistake of fact having legal consequences and was thus theoretically entitled to rescind the discharges. However, the practicality of doing so was more complicated. Paul Matthews HHJ ruled as follows (para 29):

“In my judgment the jurisdiction of the court to reverse this mistaken transaction is engaged. However, and as set out in the extract from Kennedy v Kennedy, the law requires that the mistake be sufficiently serious or sufficiently grave so as to make it unconscionable for the customers to retain the benefit of it. That, of course, means that the court must consider the position of the claimant’s customers.”

With this reasoning, the High Court awarded summary judgment for Barclays against the two representative Defendants, Mr and Mrs Terry, on the basis that it was unconscionable for them to retain the benefit of the mistake. However, the same could not necessarily be achieved for the thousands of other customers without reviewing the facts of each case individually.

The Court in the Barclays Judgment also indicated that around 3,898 mortgages had “straightforward” titles but at least 936 contained issues of priority on the Charges Register. This further complicated the process of determining whether individual customers were ‘unconscionable’ in retaining the benefit of the mistake.

Hence, the Court ‘bifurcated’ its process: a decision was made on a global basis for the common issue of Barclays’ mistake, with a second process necessary to assess individual facts for the many defendants. The bifurcated process enabled Barclays to correct their mistake with the Land Registry quickly without prejudice to potential individual unfairness.

Why is the decision significant?

The concept of a ‘bifurcated process’ applied in favour of Barclays in this case originated from Lord Leggatt’s Supreme Court judgment in Lloyd v Google [2021] UKSC 50.

In this case, the claimant originally brought the class action claim under CPR19.6 but the Court didn’t agree with this approach. Lord Leggatt suggested that an alternative ‘bifurcated process’ could be used in such cases to rule that, for example, Google had unlawfully handled personal data, without also awarding flat compensation to millions of people.

The Barclays v Terry decision is significant because Barclays successfully requested the Court use this bifurcated process, originally put forward by Lord Leggatt which was, until now, hypothetical. This could potentially mean that, in future class action lawsuits, decisions can be made on ‘common’ and ‘individual’ issues separately.

What might happen next?

Intriguingly, a similar claim to Barclays v Terry emerged in Wirral Council v Indivior and another [2023] EWHC 3114 (Comm) with a different outcome.

In Wirral v Indivior, the Claimant investors alleged securities claims against the Defendants. They asked the Court to make a declaration of liability alleged to be common to all claims, with compensation to be determined on an individual basis. As such, they requested a similar ‘bifurcated process’ to Barclays.

However, Green J struck out the case by directing under CPR 19.8(2) that Wirral not be permitted to make representative action on the basis that it interfered with the Court’s overriding obligation under CPR 1.4 to deal with cases justly and at proportionate cost.

The cost incurred by each Defendant in defending the individual case against them would be disproportionately higher than the cost incurred by the Claimants in bringing the action against the entire class.

By contrast, in Barclays v Terry the defendants (as a class) were found to not be disadvantaged by the representative action, and Barclays additionally agreed to pay defendants’ legal costs as a cost of rectifying its mistake.

It is clear from the contrast between these judgments that the Court applies the new ‘bifurcated process’ very flexibly, and only when it considers it suitable and necessary.


Barclays v Terry breaks new ground in how the courts process and issue judgments in representative actions.

A ‘bifurcated process’ is potentially more expedient and allows greater nuance in complex representative actions. However, it is also exploitable as a mechanism within representative action whereby judgments involving large groups of individuals can be made before, or even without, full consideration of each class member at that stage.

Practical Considerations:

We are yet to see how the practical considerations of this judgement will play out. The court has already identified that there are over 900 ‘complex’ titles that have priority issues, and this firm has already been approached by affected mortgagees for advice.

It remains to be seen how the individuals that fall within the category of people for whom it would be ‘unconscionable to benefit from the mistake’ pursue the recourse they have to challenge the order in Barclays Bank UK Plc v Terry [2023] EWHC 2726 (Ch).

If you are one of the mortgagees affected by this case, please contact us to speak to a member of our Dispute Resolution Team.

James Musallam
Solicitor, Dispute Resolution
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This reflects the law and market position at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought in relation to a specific matter.

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