Monday, 25 May 2020

PPI Claims - Not finished!

You took out a PPI (payment protection insurance) policy and you have since been kicking yourself so hard that one of your legs is covered in bruises and you cannot exercise. But your pain might just evaporate if it transpires that, unbeknown to you at the time, the bank or other lender who granted you credit and got you into the policy received a massive commission from the company which issued the policy. You just might be able to secure a cut of the commission or refund of some of the premiums paid to the PPI company. You would be making a so-called Plevin claim named after a Supreme Court case which gave the green light to claims of this kind. The Financial Ombudsman Service was taking up Plevin claims on behalf of borrowers but the time is now up for obtaining any redress through the Ombudsman in high commission cases which leaves court proceedings -they could probably be dealt with as  a county court 'small claim'- as the only option.

The proceedings would be on the basis that the relationship between you and the lender was unfair, under section 140A of the Consumer Credit Act 1974. Trouble is that such proceedings must be started within six years of the policy coming to an end - UNLESS! Yes, like lots of situations in the law, there are exceptions. One of those exceptions is this. The six years may be extended where your lender has deliberately concealed some fact which is relevant to your right to take action. The concealment can concern the lender's receipt of that commission and, if it does, the time for starting proceedings might not start to run until you discovered that the commission had been received or could have discovered its recipe with reasonable diligence. 
In a case just before the High Court called  Canada Square Operations Ltd (formerly Egg Banking plc) v Potter [2020] EWHC 672 (QB) the borrower only discovered a commission on a PPI policy linked to a loan agreement  which amounted to a cool 95.24% of the premium, eight and a half years after the loan agreement ended. Canada Square accepted that its relationship with the borrower had been s140A unfair. It argued on appeal against an adverse judgment that there had been no duty to disclose the commission and so there was an absence of deliberate concealment. 

Canada Square, said the High Court judge, had not taken any positive action to conceal. However, it had made a deliberate decision not to do something in circumstances where it was obvious that the existence of the commission would not be discovered for some time and that was good enough to have earned the borrower an extension of time for bringing the proceedings!

Canada Square is seeking permission to appeal to the Court of Appeal. I'll keep you posted on that. Certainly, there currently exists a judgment which can be used to support an 'unfair relationship' claim. On the strength of that judgment, you may wish to write to your lender and ask them -
1 Did you receive a commission on the PPI policy and was it paid in one lump sum?
2 How much was that commission and what percentage of the PPI premiums did it represent?
3 Why did you not disclose the commission to me?
4 Do you accept that, because of non-disclosure, our relationship was unfair within section 140A of the Consumer Credit Act 1974 and, if so, what do you propose to do about it?

Mention the Canada Square case.

You'll find loads of info on consumer rights - and much more - in my book Breaking Law.