PPI Sale – No Recovery from Remote Parties
The claimant sought repayment of payment protection insurance premiums paid by her under a policy with Norwich Union. The immediate broker arranging the loan was now insolvent, and she sought repayment from the second and other level intermediaties. She said that the commission disclosure by the defendants had been inadequate.
Held: The appeal failed.
Disapproving Harrison: ‘The view which a court takes of the fairness or unfairness of a debtor-creditor relationship may legitimately be influenced by the standard of commercial conduct reasonably to be expected of the creditor. The ICOB rules are some evidence of what that standard is. But they cannot be determinative of the question posed by section 140A, because they are doing different things. The fundamental difference is that the ICOB rules impose obligations on insurers and insurance intermediaries. Section 140A, by comparison, does not impose any obligation and is not concerned with the question whether the creditor or anyone else is in breach of a duty. It is concerned with the question whether the creditor’s relationship with the debtor was unfair.’
The non-disclosure of the commissions paid made the arrangement unfair: ‘A sufficiently extreme inequality of knowledge and understanding is a classic source of unfairness in any relationship between a creditor and a non-commercial debtor. It is a question of degree . . at some point commissions may become so large that the relationship cannot be regarded as fair if the customer is kept in ignorance. At what point is difficult to say, but wherever the tipping point may lie the commissions paid in this case are a long way beyond it.’
As to whether the defendant was liable having had only contact with the intermediary: ‘it is enough to consider the acts or omissions of Paragon itself, without exploring the conduct of others acting on its behalf. Paragon owed no legal duty to Mrs Plevin under the ICOB rules to disclose the commissions and, not being her agent or adviser, they owed no such duty under the general law either. However . . the question which arises under section 140A(1)(c) is not whether there was a legal duty to disclose the commissions. It is whether the unfairness arising from their non-disclosure was due to something done or not done by Paragon . . the unfairness which arose from the non-disclosure of the amount of the commissions was the responsibility of Paragon. Paragon were the only party who must necessarily have known the size of both commissions. They could have disclosed them to Mrs Plevin. Given its significance for her decision, I consider that in the interests of fairness it would have been reasonable to expect them to do so.’ The Court of Appeal had failed to have regard to the words of the section.
However there was no basis for making the respondent liable for the acts of the agent. The claimant was entitled to have the agreement re-opened for unfairness, but that was her only remedy.
Lady Hale, Deputy President, Lord Clarke, Lord Sumption, Lord Carnwath, Lord Hodge
[2014] UKSC 61, [2014] 1 WLR 4222, [2014] WLR(D) 487, [2014] BUS LR 1257
Bailii, Bailii Summary, SC Summary, SC, WLRD
Consumer Credit Act 1974 140A 140B 140C 140D
England and Wales
Citing:
Cited – Assicurazioni Generali Spa v Arab Insurance Group (BSC) CA 13-Nov-2002
Rehearing/Review – Little Difference on Appeal
The appellant asked the Court to reverse a decision on the facts reached in the lower court.
Held: The appeal failed (Majority decision). The court’s approach should be the same whether the case was dealt with as a rehearing or as a review. . .
Disapproved – Harrison and Another v Black Horse Ltd CA 12-Oct-2011
The appellant sought under section 104A to recover a Payment Protection Insurance premium paid in support of a loan. The borrower dealt directly with the lender, who acted as an intermediary with the insurer. The commission taken by the lender was . .
At County Court – Plevin v Paragon Personal Finance Ltd and Another Misc 4-Oct-2012
Manchester County Court – The claimant sought repayment of insurance premiums paid as payment protection insurance when aking out a loan with the defendants as advised by the second defendant. The second defendant was in liquidation by the time her . .
Appeal from – Plevin v Paragon Personal Finance Ltd and Another CA 16-Dec-2013
The claimant sought repayment of a personal protection insurance premium paid to her broker. The broker was now in insolvent liquidation, and she sought to recover the premium from the next intermediary.
Held: Any limitation of section . .
Cited – Regina (Cherwell District Council) v First Secretary of State, Secretary of State for the Home Department CA 28-Oct-2004
The applicant sought to develop an asylum centre. Rather than apply for planning permission, it had served a notice of proposed development for the Crown. The Council appealed dismissal of its objections to the use of the procedure.
Held: The . .
Cited – Clixby v Poutney ChD 1968
Cross J said: ‘I do not find it in the least surprising that Parliament, when it decided in 1942 to allow assessments to be reopened and penalties claimed at any distance of time if fraud or wilful default was proved, should have wished the . .
Cited – Gaspet Ltd v Ellis (Inspector of Taxes) 1985
S Ltd was a member of an oil and gas exploration syndicate, the agreement relating to which provided that the exploration work was to be carried out by one member of the syndicate (the operator) on behalf of the other members. The costs, expenses, . .
Cited – Gaspet Ltd v Ellis (Inspector of Taxes) CA 1987
S Ltd. a member of an oil and gas exploration syndicate, agreeing that the exploration work was to be carried out by one member of the syndicate on behalf of the other members. The costs, expenses, rewards and benefits accruing from the exploration . .
Cited – Regina (Cherwell District Council) v First Secretary of State, Secretary of State for the Home Department CA 28-Oct-2004
The applicant sought to develop an asylum centre. Rather than apply for planning permission, it had served a notice of proposed development for the Crown. The Council appealed dismissal of its objections to the use of the procedure.
Held: The . .
Cited – S, Regina (on the Application of) v A Social Security Commissioner and Others Admn 3-Sep-2009
The Claimant sought judicial review of a decision of the Defendant Social Security Commissioner refusing the Claimant (and six other appellants) permission to appeal against a decision of a Social Security Appeal Tribunal relating to their housing . .
Cited – Rochdale Borough Council v Dixon CA 20-Oct-2011
The defendant tenant had disputed payment of water service charges and stopped paying them. The Council obtained a possession order which was suspended on payment or arrears by the defendant at andpound;5.00. The tenant said that when varying the . .
Cited by:
Main judgment – Plevin v Paragon Personal Finance Ltd SC 29-Mar-2017
The court had ordered the respondent to pay the claimant’s costs. These were high because the solicitors had acted under a conditional fee agreement, and disproportionate to the funds at issue. The respondents challenged assignments of the original . .
Lists of cited by and citing cases may be incomplete.
Financial Services, Consumer
Leading Case
Updated: 10 November 2021; Ref: scu.538697