Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

[Paul210]

Re: Latest updates on PPI Judicial Review and claims on hold

What I don't get is the relationship between paying compensation and firms going bust, surely where the bank was merely a front for an insurance firm to sell their product through the bank and where the bank was then paid a commission, then the bank did the mis-selling not the insurance company?

with the big banks the insurer is often part of the overall banking group, i.e. barlcys and barclaycard use Barclays insurance (dublin) ltd, RBS group use their own in group insurer, as do Lloyds Banking Group etc etc etc.

The inter company relationship means that regardless of whether the bank or the insurer takes the hit they both take the hit via the groups financial position being weakened.

[EXC]

Re: Latest updates on PPI Judicial Review and claims on hold

What I don't get is the relationship between paying compensation and firms going bust, surely where the bank was merely a front for an insurance firm to sell their product through the bank and where the bank was then paid a commission, then the bank did the mis-selling not the insurance company?

I think the reference to 'firms' really means small firms like independent car dealers who sold PPI along with loan finance who would be liable for refunding all the premiums - most of which went directly to an insurance company - who would be at risk along with their employees jobs. So I don't think that on paper it's altogether unreasonable for a court to at least consider allowing an appeal.

Unlike mainstream litigation, in Judicial Reviews the courts are bound to consider all the effects of the decision that is under challenge and not to do so would be an abdication of their responsibility. Justice Ousley gave consideration to the issue but concluded that:

''I do not see that the nature of the measures in the Policy Statement, costly though they will be, and destructive of a number of businesses, can be seen as evading procedural protections which firms were intended by Parliament to enjoy.’’

In other words the existence of s404 shouldn't automatically give companies protection where it isn't applied.

[cappo]

Re: Latest updates on PPI Judicial Review and claims on hold

What I don't get is the relationship between paying compensation and firms going bust, surely where the bank was merely a front for an insurance firm to sell their product through the bank and where the bank was then paid a commission, then the bank did the mis-selling not the insurance company?

If the banks were to pay out compensation then increase bank charges for everyone to maintain profitability then that does beg the question whether that is a legitemate thing for them to do, that just seems trite that the can recoup the compensation by getting more money off everyone regardless of whethere they even had a claim.

It would also be seen as a 'cartell' move if they all did it at the same time,

you can bet there collective scheming minds have covered where the compensation is going to come from and it won,t be from there pockets.

[stevesouth33]

Re: Latest updates on PPI Judicial Review and claims on hold

What I don't get is the relationship between paying compensation and firms going bust, surely where the bank was merely a front for an insurance firm to sell their product through the bank and where the bank was then paid a commission, then the bank did the mis-selling not the insurance company?

If the banks were to pay out compensation then increase bank charges for everyone to maintain profitability then that does beg the question whether that is a legitemate thing for them to do, that just seems trite that the can recoup the compensation by getting more money off everyone regardless of whethere they even had a claim.

It would also be seen as a 'cartell' move if they all did it at the same time,

[jebedee]

Re: Latest updates on PPI Judicial Review and claims on hold

If orig cred ceased to exist then poss have recourse to FSCS (depending on meeting date criteria), who was the original lender and when did you take out the debt?

Again thanks but my interest is more theoretical . I am just trying to understand what happens where there is a chain of DCA's and the original lender has ceased to exist or is unable to provide the docs.

[leclerc]

Re: Latest updates on PPI Judicial Review and claims on hold

Express.co.uk - Home of the Daily and Sunday Express | UK News :: Payout ruling set to end our free banking

They're bringing this golden oldie out yet again, lol!
------------------------------- merged -------------------------------
http://www.heraldscotland.com/busine...ules-1.1097918

This is slightly off topic but on topic. An angle I haven't ever seen with regards to PPI

[pompeyfaith]

Re: Latest updates on PPI Judicial Review and claims on hold

I just cannot see any Judge overturning thr Judgment on the grounds that some firms maybe at risk to detriment of the consumer.

That is a none starter.

[pompeyfaith]

Re: Latest updates on PPI Judicial Review and claims on hold

I'd agree with Leclerc that either the Administrative Court or Court of Appeal will allow an appeal, not based on the strength of the case but because it involves so much money and puts the existence of some firms at risk - as Justice Ousley acknowledged in his judgment.

Granted it probably will put some firms at risk and many of the smaller ones, but that is more than likely not the consumers view as they are probably thinking well what a shame they did not forsee the consequences of any likely action a lot sooner instead of hiding behind the BBA.

This will also put many consumers at risk due to the knock on effect and sink them further into debt so in short **** all the companies who jumped on the bandwagon whether they be banks or any other company selling credit let them sink if that is what it takes for them to take notice.

[leclerc]

Re: Latest updates on PPI Judicial Review and claims on hold

"Permission to appeal may be given only where –

(a)the court considers that the appeal would have a real prospect of success; or

(b)there is some other compelling reason why the appeal should be heard."

Permission will be granted if they appeal.
Summer recess is end of July so I would expect the any decision would be in that kinda timescale potentially.

Not sure I can post up specsavers thing since I only gave the reasons for permission to appeal to be given. I'd say if I use my own standards, I'll save you the specsavers appointment making since I didn't give the reasons for an appeal merely reasons why permission to appeal could be given :o

[EXC]

Re: Latest updates on PPI Judicial Review and claims on hold

Exec
nice to see you are back . What do you think in respect to whether the court will allow an appeal.

The BBA has 3 shots at applying for an appeal:

1) Orally at the judgment hearing - which has already been made and refused.

2) Making a substantive written application to the Administrative Court including grounds for appeal - which have to be filed by 11 May.

3) A similar substantive application directly to the Court of Appeal.

I'd agree with Leclerc that either the Administrative Court or Court of Appeal will allow an appeal, not based on the strength of the case but because it involves so much money and puts the existence of some firms at risk - as Justice Ousley acknowledged in his judgment.

But in my view if the appeal fails at the CoA the BBA will be refused permission to appeal to the Supreme Court as the SC uses different criteria in consideration of appeal applications than the lower courts. The SC places the public interest consideration above any other and this is why Judicial Reviews - especially those involving companies - rarely get there.

So I remain quietly confident that it will reach a final conclusion by the end of the year.

[EXC]

Re: Latest updates on PPI Judicial Review and claims on hold

Yes, indeedy. The rules are there to SUPPORT and IMPLEMENT the Principles, are they not ? The Principles come first. The essence of the Law. The Rules come second. They are merely TOOLS employed by the Law.

Indeed. The FSA has been moving towards principles based regulation for years and you would have thought that the BBA's legal advisers (Freshfields Bruckhaus Deringer) would have advised all their clients that it was here to stay and that it was a case put up or shut up.

Hold on, they did!

http://www.freshfields.com/publicati...2007/17593.pdf

[Bill-K]

Re: Latest updates on PPI Judicial Review and claims on hold

Thank you, EXC. I look forward to the video of this. (Private joke - another thread...)

M. LeClerc, I couldn't find the grounds that you reckon you posted here, for the BBA to secure leave to appeal. Please link me to it, or to Specsavers, of course. Unless it was (b) "This $h1t is far too important to be denied leave." I bow to your experience in "The Industry" - but I still feel (or hope) that arrogance may indeed be superceded by reason, at last. My fiver's still on denial of leave.

[I]‘’Indeed, it is my view that it would be a breach of statutory duty for the Ombudsman to reach a view on a case without taking the Principles into account.......they [the principles] are of the essence of what is fair and reasonable.....
How can the Lords NOT take fairness and reasonability into account ? Is that not the fulcrum of law itself ?
’The unhelpful concept of the specific rules "occupying the field" is inapt to express the true position. The Principles "occupy the field"; they stand over the specific rules. It is the general performing its role as the overarching requirement which cannot be displaced by compliance with specific rules if the overarching requirement is breached. The Principles are the overarching framework for regulation. The overarching or underlying Principles are simply being applied where the rules do not cover the point.’’

[B]
Yes, indeedy. The rules are there to SUPPORT and IMPLEMENT the Principles, are they not ? The Principles come first. The essence of the Law. The Rules come second. They are merely TOOLS employed by the Law.

Doth the tail waggeth the dog ? I sure hope not. If so, then who's barking ?

[anaellie]

Re: Latest updates on PPI Judicial Review and claims on hold

Exec
nice to see you are back . What do you think in respect to whether the court will allow an appeal.

[EXC]

Re: Latest updates on PPI Judicial Review and claims on hold

BBC Moneybox interviews a lawyer from SRN Denton (who acted for the FSA) and a barrister from Matrix Chambers.

Apparently if the BBA go directly to the Court of Appeal to seek leave to appeal the CoA must make a decision on weather to allow the appeal by 14 June.

Fast forward to 13.00 BBC iPlayer - Money Box: 23/04/2011

[cappo]

Re: Latest updates on PPI Judicial Review and claims on hold

Sorry me dear - been away for a bit but better late than never I spose.

The judgment is the very best of what we could have hoped for- a categorical win on all 3 grounds.

As Tom pointed out, Justice Ousley, rather than simply refusing permission for Judicial Review (which could have been easily achieved without a hearing or even a judgment by simply ruling that their were insufficient grounds for the case to be heard), in having the case heard and comprehensively dismissing the BBA’s claim in stone, it leaves the banks with not just their claim to re-sell but a high court judgment to overturn. Any appeal to the Court of Appeal will be fought not on the basis of proving their case but disproving the view of the court - a more difficult task.



On the issue of the claim against the FOS being nearly 2 years out of time the judge ruled that even if he had accepted the BBA’s claim against them he wouldn’t have back-dated it to the date that the online resource was first published:

’I would not have refused relief on the grounds of delay if I had concluded that the FOS was applying and continuing to apply a legally erroneous construction of the rules since that ongoing error would have needed correction for the future as Mr Malek accepted. I would not have granted any relief which affected its past decisions, requiring it to carry out a review of past findings.’’

The judgment takes the form of 3 separate chapters that deal with the 3 grounds for the claim:

1) The Actionability or otherwise of the Principles
2) Principles augmenting or replacing Rules
3) The FSA’s decision to use Root Cause Analysis in favour of s404.

The BBA’s original claim included a fourth ground - Common Failings - which was dropped by the time the case made it to the hearing. This was arguably what the BBA claimed was their strongest ground and the one on which they most relied to accuse the FSA of imposing retrospective rule changes. The BBA had argued that the Common Failings which appeared in the open letter section of the Policy Statement ‘’superceded the existing rules‘’. But, embarrassingly, shortly after the BBA filed their claim the FSA wrote to them saying that they had completely mistaken the common failings for new rules as opposed to simply examples of breaches of existing rules. It beggars belief that the BBA could make such a fundamental error and this was not lost on Justice Ousley who remarked in the judgment that:

‘’After the commencement of these proceedings, the FSA made a statement saying that it feared that the Open Letter was being misinterpreted. This was seen as something of a climb down by the BBA’’.


Ground 1) Actionability of Principles

This ground challenged the FSA’s and FOS’s use of the Principles - the breaching alone of which cannot be used by a private individual in the courts to claim financial redress. The BBA argued that if the court doesn’t recognise Principles as giving rise to a legal liability then the FSA & FOS shouldn’t have any legal right to either.

But Justice Ousley thought differently and concluded that although Parliament indeed prevented the use of the Principles being relied on in a private action in a court of law, there is nothing in any legislation that precludes their use by either the FSA or FOS:

‘’I do not find the Claimant's submissions persuasive, preferring instead those of the FSA and FOS. The statutory provision being construed is s150. S150(1) deals with contraventions of rules by making them actionable as breaches of statutory duty. "Actionable" means giving rise to a cause of action in a court of law. S150(2) removes that actionability. S150(2) does nothing else. "Actionable" in s150(1) simply does not mean "capable of giving rise to obligations or compensation". So s150 does not apply to the Principles. It does not alter their function in any other way. It leaves intact any other function or effect which a non-actionable rule might have. The clear words of the section are wholly inapt to prevent rules which are not actionable giving rise to obligations as between firms and customers.’’

‘’The words which would have to be imported into the section to give effect to Lord Pannick's submissions are not there by necessary implication either. If the Ombudsman can take the Principles into account in construing other rules but not as free standing sources of obligations, (even where using them in that way did not fall foul of BBA's second main submission that they cannot apply where specific rules have been made), an exclusion of unclear effect yet of some legal sophistication would be required. It is clearly not possible let alone necessary to imply such words.’’

‘’Indeed, it is my view that it would be a breach of statutory duty for the Ombudsman to reach a view on a case without taking the Principles into account.......they [the principles] are of the essence of what is fair and reasonable..............whether the Principles had been formulated or not, and whether they could or could not be considered, the FOS would be bound to consider such essential points as whether the information given to a customer was clear, fair and not misleading, putting him in a position to make an informed choice, and whether the policy was a suitable one to be recommended for this particular individual. I accept that point. It is in reality unanswerable.’’

‘’Second, there is some sense in such a limitation. One major purpose of the s404 scheme is to require firms to examine cases whether there has been a complaint or not, and if the failure has caused loss, they have to make redress to the consumers. The consumer may have made no complaint at all. They may complain only when they hear of the consumer redress scheme. The limitation to legal liability limits the liability of the firms in a situation when they are likely to be paying compensation to a number of people who did not or otherwise would not have complained. There is one class of consumer who could lose out, and that is the person whose complaint would fail under the s404 scheme but would succeed under the Ombudsman scheme as ordinarily applied. That is a form of trade-off for the consumer in general.’’


Ground 2) Principles augmenting rules

This ground of the BBA’s case was an ‘occupied field test’. The theory being that the rules in ICOB and ICOBS exclusively were the only rules that should govern the selling of insurance and that there was no room for additional rules (Principles) to supplement them.

In general Justice Ousley ruled that the Principles were not an addition to the existing rules but an ‘’amplification’’ or ‘’restatement’’ of them. Although he did conclude that there were some instances where the principles were additional to the existing rules but that there was good reason for them being so.

To illustrate this he used some really interesting examples given in the FSA’s witness statement - which we never got to see in the court documentation we obtained:

’Ms Sinclair gave illustrations in her Witness Statement of the regulatory gap which the BBA's contention would open up. There is no specific ICOB rule which prohibits the selling of a PPI policy to someone who can never claim under it, even where the seller knows that to be the case. Such conduct would be covered by Principles 1, 3 and 6, but not if the BBA argument were correct since there were specific rules governing the sale of PPI policies.

There is no specific ICOB rule which prevents the non-advised sale of a PPI policy where the cost of the premium plus interest payable, when added to the loan, exceeds any amount which could ever be paid out under the policy. Yet that would engage Principles 1 and 6. There is no ICOB rule which prohibits, on a non-advised sale, the sale of a single premium PPI policy with a refund provision which is not proportionate to the duration of the policy where the seller knows that it is likely that the loan to which the policy was related would be refinanced shortly after the policy was taken out. This would be a breach of the Principles as explained in common failing 15. She accepted that all such conduct might, on particular facts, involve breaches of specific rules in ICOB.

The first example was used by Mr Brindle to test the true position of the BBA: was it saying that this could be dealt with by the application of the Principles, or that the application of the Principles had been exhausted by the specific ICOB rules? If the former, then the application of the Principles was accepted by the BBA and its point was limited to a debate, which it was agreed was not fruitfully for resolution by this court, as to which factual situations gave rise in practice to the application of conflicting or exhaustive specific provisions.’’

So in effect what he is saying is that the Principles passed the occupied field test by virtue of them occupying parts of the field that ICOB and ICOBS didn‘t. Neat huh?

’The unhelpful concept of the specific rules "occupying the field" is inapt to express the true position. The Principles "occupy the field"; they stand over the specific rules. It is the general performing its role as the overarching requirement which cannot be displaced by compliance with specific rules if the overarching requirement is breached. The Principles are the overarching framework for regulation. The overarching or underlying Principles are simply being applied where the rules do not cover the point.’’


Ground 3) The s404 scheme

This ground was another occupied field test. The BBA attacked the requirement for banks to conduct a Root Cause Analysis in the Policy Statement which would mean them having to pro-actively review past PPI sales and offer redress where appropriate even in cases where no complaint had been made. The BBA argued that the FSA should instead use the more formal s404 scheme - for which it was designed - because it offered the banks ‘’certain protections’’. I’d always wondered what exactly these ‘protections’ were and in his judgment Justice Ousley concluded that because of the time-consuming and cumbersome nature of setting up an s404 scheme, the ’’protections’’ amounted to nothing more than providing them with a stalling tactic:

‘’Mr Fordham put considerable weight on what he described as the protections for the industry in the need for the Treasury to make the scheme on certain bases, and for Parliament to approve it. I am not sure that those procedures are only protections for firms as opposed to means of oversight of the FSA. Be that as it may, there were different protections in the new section but the important point was that there were protections which showed that measures should not be devised to achieve the same result as a scheme would achieve, unless formulated and processed as a statutory scheme. The FSA did not want to follow the scheme route in part because of what it saw as the cumbersome procedures. Those cumbersome procedures were what Mr Fordham regarded as procedural protections. I do not see that the nature of the measures in the Policy Statement, costly though they will be, and destructive of a number of businesses, can be seen as evading procedural protections which firms were intended by Parliament to enjoy.’’

‘’Mr Fordham contended that s404 exclusively occupied the field
Although it is a necessary condition for the making of a scheme that the Treasury be satisfied of widespread misselling and loss by private persons upon a report to it by the FSA, the existence of circumstances which would warrant a report by the FSA and the Treasury being satisfied of those two requirements, is not by itself sufficient to deprive the FSA of all power to act in any other way to deal with misselling of PPI. It would be absurd if the regulatory powers diminished in range and scope the more serious the circumstances in which they were needed’’

‘’I do not think that it is useful to ask and answer the question of what field is occupied by s404, and then ask whether the changes in the Policy Statement occupy it. That rather distracts from and misstates the issue of statutory construction. The question is whether or not the provision for a scheme in s404 carries with it the necessary implication that what the FSA has set out in the Policy Statement is excluded from the FSA's powers as regulator. It is certainly not excluded by any express words. A specific provision is capable of carrying an implied exclusion of other general or other specific powers, but I do not consider that s404 implicitly excludes what the FSA has done, even though it would have been possible for a scheme to have been set up to achieve much or rather more of the same end, and part of the reason why it was not was the cumbersome nature of the remedy, and the fact that it would not apply to breaches of the Principles…… I have already said that the existence of circumstances in which a scheme could successfully be promoted is not of itself a basis for the exclusion of other remedies.’’

as always EXC very eloquently put