Lloyds Wins Landmark Case Over PPI Claimsposted on 28 July 2010 | posted in General Category | ( 0 ) CommentsLloyds TSB has won a landmark court victory which will curtail the number of ways consumers can challenge the enforceability of debts relating to payment protection insurance (PPI). A judge, who decided to hear the PPI case in the High Court in order to set a binding judgement, dismissed four separate claims brought against Lloyds subsidiary Black Horse Finance. The case was brought by a customer named David Speak after he defaulted on a PPI policy contained in a loan. Judge Waksman ruled against claims that Black Horse mis-sold PPI as compulsory, had mis-represented the product at point of sale, was in breach of insurance conduct of business rules, and had breached the 1974 Consumer Credit Act by creating an unfair relationship between lender and borrower. As the ruling was made in the High Court it is binding for county courts, which is where PPI cases are traditionally heard, and means that future claims concerning PPI can only be brought against banks on grounds of misrepresentation at an individual point of sale. The decision came as Lloyds announced it would no longer be selling PPI policies. David Bowden, senior litigation lawyer at Lloyds TSB, told Credit Today: "The judge in this case ruled for us. So we have won and dismissed all four of the defendant’s claims. "Not only have we won but we have set a precedent in the high court that county court judges are going to have to follow." David and Caroline Speak brought the charges against Black Horse after defaulting on a loan of £5,000, which was taken out with a PPI policy. However, the honourable judge Waksman QC ruled in favour of Black Horse after deciding that testimony of the Black Horse PPI saleswoman, Ms O’Halloran, was more consistent than testimony provided by Mr Speak. Bowden added: "In relation to the current wave of claims this is the first high court decision that has gone in favour of the seller. A lot of the banks have tried to settle with customers but we have dug our heels in on this." PPI has attracted controversy over the way it is sold, with many consumers unaware of the exact circumstances that are covered by their PPI policies. Between April and June this year, the Financial Ombudsman Service received 13,520 complaints, of which 81 per cent have been upheld. The decision by Lloyds to stop selling PPI policies has been welcomed by consumer watchdog Which? Peter Vicary-Smith, chief executive of Which?, said: "Lloyds decision to stop selling PPI is a huge victory for consumers. Hopefully other banks will follow suit and we’ll finally see the back of this." This decision would now ultimately mean that people who wish to claim PPI back would have to prove that they were mis-represented. This in itself is a huge task, and we can only see unsure times ahead for PPI claims. Share this blog entry:
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