UK Supreme Court rules against RBS in PPI claims case

Court of Appeal decision overturned

UK Supreme Court rules against RBS in PPI claims case

Legal Insights

By Terry Gangcuangco

The Supreme Court in the UK has ruled that the payment protection insurance (PPI) claims against RBS in Smith and another v Royal Bank of Scotland were brought before the relevant time limit expired.

“In August 2019, Ms [Karen] Smith and Mr [Derek] Burrell each brought a claim in the county court, seeking an order under section 140B of the Consumer Credit Act 1974 that RBS repay all the money paid by them for PPI (less the redress already paid), plus interest,” reads the Supreme Court Press summary seen by Insurance Business.

“Ms Smith’s claim succeeded before the district judge; and in Mr Burrell’s case the district judge made a ruling that the claim had been brought in time. Those decisions were both upheld on appeal by the county court judge.

“On second appeals, however, the Court of Appeal ruled in favour of RBS, holding that in each case the relevant time limit for bringing a claim had expired before the claim was brought… The Supreme Court unanimously allows the (latest) appeals, holding that both claims were brought before the relevant time limit expired. The orders made in the county court in each case are, therefore, restored.”

It was noted that the two claimants were sold PPI while they had credit cards with RBS but were not originally told that most of the money paid for insurance did not go to the insurer but was retained by the NatWest-owned bank as commission.

“RBS only informed Ms Smith and Mr Burrell that it had received commission when it offered them redress (in 2018 and 2017, respectively) under a scheme for PPI mis-selling established by the Financial Conduct Authority,” the Supreme Court said in its summary.

Smith’s PPI agreement ended in 2006; her credit card agreement with RBS, in 2015. For Burrell, the respective years were 2008 and 2019.

The Supreme Court said: “In each case the right to claim a remedy depends on whether the relationship was unfair to the claimant at the time when the relationship ended.

“Therefore, the cause of action (the right to claim a remedy) did not accrue, and the six-year period for bringing a claim did not commence, until the credit relationship ended (in 2015 and 2019, respectively). It follows that both claims were brought in time.”

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