Dismissal of challenges to PPI Plevin-type settlements upheld by the Court of Appeal
On 26 September 2024, the Court of Appeal handed down judgment in the joined appeals in Self v Santander Cards UK Limited and Harrop v Skipton Building Society. Both appeals were dismissed, with Alexia Knight (instructed by Jeremy Fowler and James Southworth at Eversheds Sutherland) securing victory for Santander.
The claimants in both cases had complained about undisclosed commission charged on payment protection insurance (PPI) policies, under s.140A of the Consumer Credit Act 1974. Prior to bringing their claims before the Courts, they had utilised the FCA’s redress regime, established in response to the Supreme Court’s decision in Plevin v Paragon Personal Finance. That redress scheme laid down detailed rules, guidance and evidential provisions guiding financial institutions on how to respond to consumers’ undisclosed commission complaints arising from their PPI policies, and setting out a basic redress methodology. Both Mrs Self and Mr Harrop had accepted offers of redress determined, by their respective credit provider, in accordance with that FCA scheme. The redress was offered in full and final settlement of claims in respect of undisclosed commission.
The resulting Court of Appeal judgment contains important guidance on the finality of settlement agreements in PPI claims and on the application of s.140A CCA to settlement agreements.
Having compromised her claim on terms that “I want to accept the above offer of redress in full and final settlement of my complaint against SCUKL and NewDay”, Mrs Self commenced a claim under s.140A CCA, by which she sought to re-open the settlement she had reached. She argued that there was no valid consideration for the compromise, because either, (pursuant to the FCA rules), Santander was already under an obligation to pay the redress, or (by its redress letter), Santander had admitted liability. Alternatively, she argued that Santander’s redress offer and the waiver were limited to claims under the DISP provisions of the FCA Handbook, and had not compromised a civil claim. Her final argument was that, if she failed on her first grounds and there was indeed a binding settlement, there was no bona fide compromise, and/or it should be re-opened because it did not extinguish the unfairness to her in the relationship between the parties (effectively reopening the s.140A CCA claim).
Mrs Self’s claim failed at first instance, and her first appeal was dismissed. Her grounds of challenge before the Court of Appeal had potential ramifications for the finality of every such settlement of a PPI claim reached by financial institutions in accordance with the FCA’s rules.
In dismissing both appeals, the Court of Appeal held that the construction of the waiver entered into by Mrs Self as being restricted to DISP was “unarguable”, and reiterated established case law that the Courts should be “slow” to go behind bona-fide compromises such as these. Significantly for other PPI claims, the Court held both that the DISP regime did not impose upon an institution an enforceable obligation to make a payment of redress, and further that there was nothing within DISP that prevented a respondent from making an offer of redress conditional upon the waiver of past or potential future claims.
Santander Cards UK Limited was represented in the Court of Appeal by Alexia Knight.
The judgment can be found here.
