Key legal issue: Does a contractual indemnity signed in 2000 cover liabilities arising from conduct that happened decades earlier? The Court of Appeal says no, an indemnity only bites on "acts or omissions" while a party is "performing duties under this agreement," and you can't perform duties under an agreement before it exists. Sweeping continuity language elsewhere in the contract wasn't enough to override that.
Santander has overturned a £677 million indemnity award in favour of AXA France, in a ruling that will make risk and legal teams look twice at how their indemnity clauses are worded, especially in book transfers, agency relationships and long-tail liability books.
The Court of Appeal's decision in AXA France IARD SA v Santander Cards UK Ltd [2026] EWCA Civ 1185, handed down on 15 September, unwinds most of a High Court judgment that IB reported on last week. Here's the part of the story worth dwelling on: not who won, but why — because the reasoning has implications well beyond one PPI dispute.
The case traces back to store-card PPI sold from the 1970s to 2005, originally underwritten by companies AXA acquired via Genworth in 2015, and sold by a business Santander acquired in 2009. A formal Agency Agreement between the parties' predecessors, signed in December 2000, contained an indemnity at clause 12.2: Santander's predecessor would cover AXA's predecessor for "any liability which they may incur by reason of any act or omission... while performing their duties under this agreement."
The High Court read that indemnity as covering the whole historic book, new and old policies alike, because roughly 85% of the £677 million award related to sales made before the 2000 agreement was even signed. Santander appealed on a single, narrow point: that the clause is forward-looking only, and can't reach back to cover conduct from a relationship that pre-dated the written contract by decades.
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Lady Justice Cockerill agreed with Santander, and the reasoning is instructive for anyone drafting or relying on an indemnity clause. Duties under an agreement, she found, can only be performed once the agreement exists so an indemnity tied to "duties under this agreement" is inherently prospective unless the contract says otherwise in the clearest terms. General continuity language elsewhere, recitals about the relationship carrying on, or evidence that indemnities like this are market-standard couldn't do that work, particularly where the trial judge had already found no equivalent indemnity existed before 2000. Clause 17, which stated the agreement covered dealings "from and including the Effective Date," reinforced the point: you don't need forward-looking language like that if the deal was always meant to reach backward too.
AXA's fallback argument that even without the indemnity, it should get a contribution from Santander under the Civil Liability (Contribution) Act 1978 for money paid out under regulatory pressure was dismissed too, on both the original hearing and the cross-appeal. The court held that paying redress because a regulator's complaints-handling rules required it isn't the same as being "liable" to the customer in a way that could be tested in court. Since no PPI customer could actually have sued Santander's predecessor and won on the same facts, there was no shared liability for AXA and Santander to split.
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For M&A and legacy-liability specialists, the takeaway is blunt: if you're buying a back book through a Part VII transfer, an agency novation, or an outright acquisition, don't assume an indemnity automatically follows the liabilities historically associated with the business. Courts will hold drafters to the tense and structure of the actual clause, even where the commercial backdrop makes a broader reading tempting. AXA inherited this dispute through its 2015 purchase of two Genworth entities; the wording it relied on had been sitting in a 25-year-old contract, agreed by parties who, at the time, were both still part of the same corporate group and had no particular reason to fight over it.
Genworth, which retains exposure to the outcome through its own arrangements with AXA, said it was assessing next steps, including the possibility of a further appeal.
