Sonder seeks permission to appeal to the Court of Appeal
posted 17th February 2025
In some tentative good news for a Friday evening, we can confirm that Sonder has sought permission to appeal to the Court of Appeal in relation to the Upper Tier Tribunal (UTT) decision on TOMS and material alteration.
We understand that Sonder is seeking to appeal the decision based on:
- The misinterpretation of the meaning of “material alteration” and “direct benefit to the consumer”.
- The fact that that the UTT has not taken into account the economic reality of the situation.
- The UTT erring in making the decision based on the FTT already having full knowledge of the lease terms when making its own decision.
We say that this is “tentative” good news because there are still several possible outcomes and risks.
Sonder firstly needs to be granted permission to appeal from one of the Courts. Assuming that permission is granted, we will then have to play the waiting game for several months until a date is set for the Court of Appeal hearing. We will then of course need to await and review the result.
What now?
It is good news that Sonder’s dispute is going further than the UTT decision, which we feel was quite vague and inconsistent in its response, and may have thus caused confusion or chaos for the industry. However, the wait for appeal of course creates more uncertainty for the industry over the coming months.
With this in mind, we would now encourage every business to consider its own options and risks. This includes businesses who have put measures in place to help mitigate the risks of TOMS - as we have emphasised over the past couple of years, although some strategies may give a better argument and lower risk for TOMS (and indeed the UTT decision does not appear to discount all circumstances from TOMS), they also do not guarantee TOMS. We of course also have to consider the possibility of a CoA decision being even less favourable to businesses.
The period between now and the CoA decision in Sonder gives us time to consider options in detail, quantify any risks and consider any contingencies required. Every business is different, and everyone’s attitude to risk is different, so we would recommend that you look at your own position in detail.
Now that we have confirmation of appeal, we are now open to discussing with all businesses the various options and risks. Please contact Paul (paul@vatnav.com 07525 910372) if you would like us to assist with this.
One final thing to note is that we understand that, if Sonder's appeal is granted, Sonder will be seeking financial support from the sector.
