Santander has clawed back the upper hand in one of the insurance sector's longest-running legal scraps, after the Court of Appeal set aside most of a High Court judgment that had ordered the bank to pay AXA roughly £680 million over historic payment protection insurance (PPI) mis-selling.
The ruling, handed down this week, overturns the bulk of a 2025 decision that went firmly in AXA's favour. Judges granted Santander's appeal, setting aside the trial judge's finding on the majority of AXA's indemnity claim. They also rejected a separate appeal from AXA, which had wanted the court to revisit the earlier dismissal of its contribution claim. Put simply: Santander is no longer on the hook for the vast majority of AXA's mis-selling losses.
It's a dramatic reversal for AXA, whose lawyers had been confident going into the hearing. The insurer's costs stem from PPI policies underwritten by two companies it acquired from Genworth Financial back in 2015. Those policies were originally sold by GE Capital Bank, a business Santander picked up in 2009, decades after the underlying agreements between the parties were first struck.
The dispute traces back to an agency agreement signed between the two sides' predecessors in 2000, under which Santander's predecessor sold PPI on AXA's behalf. AXA took the case to the High Court in 2021, arguing that an indemnity clause in that agreement made Santander responsible for the fallout from policies mis-sold decades earlier, some going back to the 1970s.
In July 2025, the High Court agreed. Mrs Justice Dias found that AXA had a valid claim for an indemnity covering the redress and Financial Ombudsman Service fees it had already paid out, a bill that ran to almost £500 million in consumer redress plus more than £70 million in complaint-handling costs. Santander was granted permission to challenge that outcome soon after, with the appeal expected to take between 12 and 18 months to resolve.
At the appeal hearing this summer, Santander's central argument was one of timing. In submissions to the court, the bank contended that the indemnity was only ever meant to cover conduct after the 2000 agreement was signed, not liabilities tied to policies sold years before it existed, and that the bulk of the disputed sum related to exactly those pre-agreement sales. AXA pushed back, insisting the wording of the agreement covered future losses regardless of when the underlying policy had been written, and pointed out that Santander had continued to collect the vast majority of ongoing premium income throughout. The panel of appeal judges ultimately sided with Santander on that point.
The ruling matters well beyond the two named parties. Genworth, the US-listed insurer that originally underwrote the policies before selling the relevant units to AXA, would have stood to recover a large share of any payout under prior agreements between the companies. It had already told investors it expected to receive close to $750 million depending on the final exchange rate if AXA's original win held up.
That prospect now looks far less likely. In a statement issued this week, Genworth president and chief executive Tom McInerney said the company was "very disappointed" with the outcome and confirmed it was reviewing next steps alongside AXA, "including options for further appeals." He added that Genworth had never built the potential proceeds into its financial planning: "Since we have not factored any recoveries from the case into our capital allocation plans, we remain focused on our three strategic priorities: creating shareholder value through Enact, driving growth through CareScout, and maintaining self-sustainability in our Closed Block."
That framing gives Genworth some cover, the company has consistently treated any recovery as a bonus rather than something baked into its balance sheet. But for a legal saga that has dragged on for the best part of five years, this is a heavy blow, and one that leaves open the possibility of a further trip to the Supreme Court if either side chooses to push on.
PPI remains Britain's costliest consumer financial scandal by a distance. Firms have paid out more than £38 billion in redress since 2011, according to Financial Conduct Authority data, across more than 32 million complaints — and, as this case shows, insurers and lenders are still fighting over who ultimately picks up the tab more than a decade after the original mis-selling took place.
For brokers and underwriters watching from the sidelines, the case is a reminder that legacy liabilities from decades-old distribution arrangements can resurface long after the original business has changed hands several times over. Agency and indemnity clauses drafted in the early 2000s are still being tested in court today, with hundreds of millions of pounds riding on how a judge interprets a handful of contractual sentences written 25 years ago.
Neither AXA nor Santander had issued a formal public statement on the judgment at the time of writing.
