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

[EXC]

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

I see RBS are using some novel language in the notes on their PPI complaints data:

''The number of new PPI complaints received increased throughout 2010, as a result of continued media coverage and mounting Complaint Management Company activity. During the last three months of 2010 RBSG commenced issuing stay letters in cases that are affected by the ongoing Judicial Review, resulting in fewer final decision letters being issued.''

The word 'stay' is a term for the suspension of legal proceedings and something which can only be authorised by a court. In using it to justify unilaterally holding up the complaints process, it looks like they're attempting to give their actions some kind of judicial authority.

RBS - Complaints data

[Chip Tuesday]

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

Bit of a blow:

No royal wedding in PPI litigation: Buckingham & Buckingham v Black Horse Limited

http://www.lexology.com/library/deta...02-28&utm_term=

PPI misselling: no fiduciary relationship (ie a duty of care) between brokers and their clients, no breach of duty (if there were one) by collecting commission, no misrepresentation.

CT

[EXC]

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

The moral of that case is don't litigate in PPI disputes.

[cardinals]

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

A rather harsh judgement (particularly given a £7k premium on a £13k loan)

That is about the eighth reported case to be lost on PPI yet there are still ATE insurers operating in this market. There is also a firm of Solicitors regularly advertising in the press for 100% compensation cases meaning that they must be litigating (and given the frequency of tha adverts at some volume).

As there has been only one reported Court win the above implies that there are winable cases being settled before hearings.

Does anyone know what the pleadings or special features of those cases might be?

[leclerc]

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

The reason that they are still litigating is that the losses so far are only at County Court level ie no precedent setting cases so far.

[Amethyst]

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

Bit of a blow:

No royal wedding in PPI litigation: Buckingham & Buckingham v Black Horse Limited

http://www.lexology.com/library/deta...02-28&utm_term=

PPI misselling: no fiduciary relationship (ie a duty of care) between brokers and their clients, no breach of duty (if there were one) by collecting commission, no misrepresentation.

CT

Thanks CT, I'll post this as a seperate sticky too.

[cardinals]

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

My apologies if the below is a repost.

It is almost certainly a somewhat biased report as the Solicitors are Defendant side and would be unlikely to highlight any weaknesses in their own case.

• Wragge & Co LLP
• Greg Standing and Susan Land
• United Kingdom
• December 20 2010

Wragge & Co works closely with a number of lenders including Black Horse who are currently faced with high volumes of payment protection insurance (PPI) mis-selling and Consumer Credit Act (CCA) enforceability claims brought against them by claims management companies and fuelled by conditional fee agreements and after-the-event insurance policies.


The success that Black Horse has had in defeating such claims demonstrates that lenders who can show that they had compliant documented sales procedures are well placed to resist such claims, despite not being able to call the individual who sold the policy to give evidence at trial.#


It was a common feature of all the Black Horse cases that:

• The lender did not have the seller at trial to give evidence
• The lenders' Quality & Assurance Team gave evidence as to what its documented processes and procedures were
• The claimants were unconvincing witnesses
• The claims of misrepresentation were dismissed
• The claimants' sworn oral evidence at trial bore little or no resemblance to their signed witness statements

The cases are analysed in more detail below.


Judge's decision to reject PPI mis-selling claims under Insurance Conduct of Business (ICOB) rules, negligence and unfair relationship upheld
Harrison v Black Horse Ltd was an appeal heard before His Honour Judge Waksman QC, sitting as a Judge of the High Court. As a High Court appeal, the decision is binding on lower courts and is the most significant of the judgments. It is also the first time an appeal court has considered the question of "unfair relationships" introduced by the CCA 2006.

The first instance decision
Please click on the link to our report on the first instance decision. In brief, the first instance court found that the lender's procedures ensured that the lender had conducted a proper assessment of the borrowers' demands and needs. The lender had also complied with the ICOB rules bringing to the attention of the borrowers all matters which it was obliged to bring to their attention pursuant to the ICOB rules. The court agreed with the lender that compliance with the ICOB rules meant that the relationship between the parties was not unfair.

The appeal
The borrowers alleged that the lender failed properly to ascertain the borrowers' demands and needs because the Demands and Needs (D.A.N) questionnaire was itself inadequate and there was no proper assessment of the suitability or otherwise of the PPI being offered. This allegation was rejected by the appeal Judge, Judge Waksman.

The borrowers also complained that commission earned by the lender constituted an inducement which gave rise to a material conflict in breach of the ICOB rules and further that the entire system of selling PPI was flawed. Again the judge rejected this complaint. In fact the sales person neither knew of, nor benefitted from, the commission.

He also rejected the appeal in respect of negligence concluding that given the lender's limited advisory role, it could not be expected to advise more widely on the question of cost of the policy under a common law duty of care.

Finally, the borrowers claimed that there was an unfair relationship based on the fact of the (large) commission, the limited length of the PPI and its cost. Judge Waksman concluded that notwithstanding that the first instance Judge did not deal with non-disclosure of the commission, it was not significant because it would not have caused an unfair relationship, whether taken by itself or together with other features of the transaction. Again, this ground of appeal was also rejected.

No misrepresentation and no breach of the ICOB rules
Facts

In Snailham & Elliott v Black Horse Ltd, although the borrowers had maintained their monthly repayments they argued that in doing so they had suffered significant financial hardship arising out of the purchase of the PPI. As a consequence, they pursued a claim for the refund of the PPI premiums. The borrowers contended that the lender's employee misrepresented to the borrowers that by purchasing PPI they would improve their chances of obtaining credit; alternatively, the fact that the employee was so persuasive and pushed the product hard was sufficient to amount to a representation. They are also claimed that there was an unfair relationship between the parties and that the lender breached the ICOB rules because, among other things, the cost of the PPI far outweighed any benefits it afforded to the borrowers and the PPI exclusion clauses made the PPI policy of minimal value to the borrower given Miss Snailham's pre-existing medical condition.

Decision
The case came before Her Honour Judge Corkill sitting in the Barnsley County Court. The court held that the lender had informed the borrowers that PPI was optional and that there were no breaches of the ICOB rules. The court found that the PPI was suitable for the borrowers' needs and the D.A.N questionnaire used by the lender constituted a proper investigation of the borrowers' demands and needs. In this respect, the court referred to the comments of His Honour Judge Waksman in Black Horse Ltd v Speak where the court, having found that the lender's employee had used the D.A.N questionnaire, was satisfied that there had been no breach of the ICOB rules. The allegation of an unfair relationship was rejected. The borrowers had a choice as to whether to accept the lender's terms for the loan or not and subsequent copy documents which were sent to the borrowers were very clear.

No breach of the ICOB rules and no "unfair relationship"

Vernalls v Black Horse Ltd was a case heard before His Honour Judge Harris QC, sitting in the Oxford County Court.

The issues
The borrowers' claim was for the recovery of the PPI premium paid by them when they entered into a fixed sum loan agreement in September 2006. The borrowers had in fact made two claims under the PPI policy. They claimed that the lender had breached the ICOB rules and that there was an unfair relationship between the parties. The alleged breach of the ICOB rules was that Mrs Vernalls should have been asked whether she would receive sick pay from her employer. As to the allegation of an unfair relationship, the borrowers relied on the facts that the lender paid commission out of the £11,000 premium and that the salesperson was on a bonus scheme. The borrowers also argued that the product was expensive and that the lender did not offer the borrowers the opportunity to borrow a further £11,000 rather than take the premium.
Decision

The court found that there had been no breach of the ICOB rules, nor was there an unfair relationship. As to the bonus, HHJ Harris QC said: "...because the salesgirl was on a bonus, that does not make the agreement unfair. It existed to incentivise her to carry out the procedures properly".
Further, the court ordered that the borrowers pay the lender's legal costs in the sum of £15,000.
This decision has subsequently been affirmed in Harrison.

No unfair relationship - borrower was not told PPI was compulsory

In Morris v Black Horse Ltd, the borrower argued that the relationship between her and the lender was unfair because she was told PPI was compulsory.

The facts
It was the borrower's evidence that she telephoned the lender and said she wanted the quote but without PPI (having been offered quotes with and without PPI). She argued that she was then told that she could only have the loan with PPI. The borrower argued that she was not told PPI was optional. The lender argued that the borrower's version of events was false and further could not be accurate because of the lender's procedures. The seller of the policy was unable to give evidence at trial but a second employee of the lender gave oral evidence on the lender's procedures and training requirements.

Decision
The court found that it was not convinced that the seller had told the borrower that PPI was compulsory; there was no reason for the seller to say it was. Further the borrower's account of events was not factually correct. She was ordered to pay the lender's legal costs in full.

No mis-selling and no unfair relationship
In Soulsby v (1) Firstplus Financial Group (2) Loans.co.uk Ltd, Firstplus sought to strike out parts of the Soulsbys' claim as having no realistic prospect of success at trial.

The issues
Firstplus, (the lender) offered secured loans to customers and Loans.co.uk (the broker), was a credit broker. The lender advanced money to the borrowers pursuant to three successive written credit agreements arranged through the broker. Concurrently with the making of each of the three loans, the broker sold PPI policies to the claimants. The claimants complained of mis-selling of the PPI policies. After commencement of the proceedings, the claim against the broker was settled. The lender's strike out application was heard on 5 February 2010 in the Leeds District Registry of the High Court. As this was aHigh Court decision, it is binding on the County Court.

Decision

The court struck out the majority of the borrowers' claims which were based on:

• Uberrimae fidei (utmost good faith)
• Misrepresentation
• Breach of fiduciary duty
• Breach of statutory duty under the Financial Services and Markets Act 2000 (based on their alleged unfair treatment)
• Unfair relationship under the CCA 2006

The court rejected the "uberrimae fidei" argument on the basis that the borrowers and the lender were not in the relationship of insurer and insured (the classic example of utmost good faith contracts), nor did the agreements fall into any of the established categories. The court rejected the fiduciary duty argument because the borrowers had failed to set out the factual matrix from which the duty arose and because the relationship between banker and customer does not ordinarily give rise to a fiduciary relationship.

The borrowers alleged that an unfair relationship existed between the parties in relation to all three agreements. There were successive consolidations in this case, i.e the first agreement by the second, and the second by the third. The first and second agreements (dated 2002 and 2003 respectively) were "related agreements" of the third agreement (dated 2005). An agreement becomes a "completed agreement" once there is no sum payable under the agreement and there is no sum which would or might become payable. The lender successfully argued that the first and second agreements were protected once the third agreement was made in 2005, as they then became "completed agreements" (there being no longer any sums payable under either of them). Consequently, the 1974 Consumer Credit regime applied whereby the agreements could be challenged as extortionate credit bargains (although they had not been) but could not be challenged as giving rise to an unfair relationship. Therefore, any references to the first and second agreements in the claim would have to be struck out.

PPI suitable for borrowers' demands and needs
Kerry v Black Horse Ltd was a case heard before His Honour Judge Waine, sitting in the Chesterfield County Court. The borrowers claimed that the PPI (purchased at the same time as the loan) was sold to them in breach of the ICOB rules. The lender's position was that the PPI policy sold to the borrowers was suitable for them and that the lender carried out a proper assessment of the borrowers' demands and needs prior to recommending the policy. The lender also argued that it had complied with its own procedures the purpose of which was to avoid any such complaints by borrowers and to avoid putting them in breach of the ICOB rules.

The facts
The borrowers took out a fixed sum loan agreement for £18,000 (comprising two separate fixed loan sums repayable over ten years) and PPI of £7,753.99. The PPI provided the borrowers with cover depending on whether they died, lost their jobs or were unable to work through sickness.

The loan agreement and the loan under the PPI were settled 13 months later on a voluntary basis by the borrowers who had made all payments under the loans prior to that date. The borrowers considered that the settlement figure which they had to pay was higher than they expected and they queried it with the bank but they did pay what was asked of them. The borrowers were required to pay £3,672.86 under the rebate scheme for the PPI in the event of early repayment. Sometime later it was suggested to them that they had overpaid under the agreement and consequently they consulted their present solicitors.

Decision
The judge found in favour of the lender. The judge commented on the borrowers' statements which were in identical terms and which were inaccurate and clearly not checked.

The judge rejected outright the allegation that the PPI was presented to the borrowers in a pressurised manner. The judge found that the borrowers were taken through the D.A.N questionnaire and that the necessary documents were sent to the borrowers to read through before they signed them.
The judge was satisfied that when the lender's employee recommended the PPI, it was suitable for the borrowers' demands and needs at the time the personal recommendation was made. This encompassed any existing entitlement to sick pay by one of the borrowers.

The judge was also satisfied that the lender met other requirements of the relevant ICOB rules such as obtaining full details of the borrowers' finances and taking into account the costs of the contract where this is relevant to the borrowers' demands and needs. The judge was of the view that the PPI provided was highly relevant to the peace of mind of the borrowers given that their total borrowings matched the equity in their home and they had no other real assets.

Comment
These cases are significant because they continue the line of victories for lenders which should assist further in reducing the number of similar claims brought by borrowers.


Common themes running through these decisions and confirmed by the appeal Court's findings in Harrison are:

• It is very difficult to persuade the court that there is an unfair relationship between the parties where lenders ensure that their internal procedures and systems are compliant with the ICOB rules
• In Harrison, the Court went further and said that even if the ICOB rules had been breached, the claims would still have failed on the basis that the breaches of the ICOB rules did not cause the loss (on the pleadings) and therefore the claims would have failed on causation in any event
• Borrowers had a choice when purchasing PPI and an option to cancel
• An absence of oral evidence from the actual sales representative was not fatal to the lender's case even if there was a factual dispute
• The costs of the PPI policy were irrelevant to a mis-selling claim and to the question of unfair relationships, as was the fact that the lender's employee was paid a bonus
• Lenders are not expected to advise more widely on the question of the costs of the policy under a common law duty of care

The Harrison decision has effectively 'knocked on the head' claims pleaded on the basis of breach of the ICOB rules, negligence and unfair relationships. The judgment will also bolster the arguments of some lenders that sanctions for breach of the ICOB rues can only be administered by the FSA.

Finally, in Soulsby, the courts have clarified that arguments based on contracts of "utmost good faith" and breach of fiduciary relationship are likely to fail.

[leclerc]

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

Likelihood is that the seller of the PPI may have left the company, would not remember a specific sale so would stick to the bank spiel(rather than getting sacked), and that no phone call(if made over the phone) would be available.

[EXC]

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

The judgment will also bolster the arguments of some lenders that sanctions for breach of the ICOB rues can only be administered by the FSA.

If some lenders are arguing that a breach of ICOB isn't actionable by a private individual then they need to look at the BBA's case which is founded on the basis that both ICOB and ICOBS are actionable - whereas the principles aren't. And that is their case, that as unlike ICOB & ICOBS, the principles would give rise to actionability by way of the policy statement.

If you do word search for 'actionable' in the JR transcripts you'll find Lord Pannick repeatedly making that point and that the actionability of both ICOB & ICOBS is expressly provided for by act of Parliament.

[Amethyst]

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

Ref Buckingham v Black Horse - the fudiciary relationship thing was sorted in Yates v Nemo wasn't it ?

That Wragge article doesn't mention nemo either.

[EXC]

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

The court have confirmed my suspicions that permission for Judicial Review has yet to be granted and that the judgment will at least rule whether the application for Judicial Review has succeeded.

If it is granted it won't require any more court time as it was a 'rolled' hearing and the judgment will incorporate the Judicial Review itself.

If it isn't granted (either against the FOS and/or FSA), according to Judicial Review procedure, the claimant would have 7 days in which to ask the court to 'reconsider'. But there appears to be no appeals procedure beyond that.

Publications - Guidance - Administrative Court


PART 54 - JUDICIAL REVIEW AND STATUTORY REVIEW - Ministry of Justice

Listings still haven't anything in the diary for a judgment hand-down so it's unlikely to be before the first part of next week. Tom's going to try speaking to Justice Ousley's clerk to get an idea of when judgment will be given.

[cappo]

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

hi all, sorry to hijack thread, something you all might find useful on the independent (newspaper) site regarding banks writing off 25% more debt towards the end of 2010 (my wifes going to have to teach me to cut and paste!) also barclays have taken over egg credit card accounts (independent) headlines.

[di30]

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

Hi Cappo

If you scroll along the link you want to copy and paste....

Click on the mouse the same time whilst dragging it across the link or whatever you want to copy, then you - Right click.
Take it to where you want to post it, then you - right click again, the word paste will come up and there be it.

Have a practice. Good luck. x

[cappo]

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

Hi Cappo

If you scroll along the link you want to copy and paste....

Click on the mouse the same time whilst dragging it across the link or whatever you want to copy, then you - Right click.
Take it to where you want to post it, then you - right click again, the word paste will come up and there be it.

Have a practice. Good luck. x

hi di i,ll try that tommorow,thanks your a star

[di30]

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

hi di i,ll try that tommorow,thanks your a star

Your very welcome and good luck, you will get there.
My son shown me what to do. And I got there lol. x