The Supreme Court is soon to consider an important case in the ongoing Payment Protection Insurance (PPI) saga, having granted the Claimants in Harrison v Black Horse permission to appeal.
The Court of Appeal considered the case of Harrison v Black Horse back in October 2011. In brief the Claimants took a loan with Black Horse who also arranged a PPI policy and did not disclose the amount of commission they would retain from the arrangement. The Claimants argued that the commission should have been disclosed and was disproportionate, so creating an unfair relationship.
In the first instance court decided in favour of the lender and the appeal court followed suit, ruling inter alia that on the facts of this case there was no unfair relationship created under s140 of the Consumer Credit Act 1974 by the lender charging a commission to arrange the policy. In addition there was no obligation under the Insurance Conduct of Business rules or otherwise to disclose the commission. A decision that was no doubt welcomed by many lenders.
The Supreme Court has now granted the Claimant’s permission to appeal the judgment, so lenders will have to wait a little longer for a final decision in this landmark case which it is hoped will provide more certainty in this area going forward.
It has been suggested that there will be a rush of PPI cases over the coming months to take advantage of the recoverable CFA and ATE regime. Once the Legal Aid, Sentencing and Punishment of Offenders Bill is passed in early 2013, cases of this type are likely to reduce as Claimants can no longer recover their CFA success fee and ATE insurance premium from their opponent if they are successful.