Jonathan Butters succeeds in Court of Appeal financial mis-selling case

Jonathan Butters succeeded in the Court of Appeal on behalf of consumers who had been mis-sold a policy of payment protection insurance. The Claimants took out a loan alongside which they were sold a PPI policy which was paid for by a lump sum premium financed by the loan. Despite the length of the loan being 25 years, the term of the insurance was only five years. 

At trial the Defendant had accepted that it was in breach of the Insurance Conduct of Business rules in failing to ensure that the policy met the Claimants’ demands and needs. The Claimants had not been asked at all about the length of cover they wanted or needed. The judge below found that causation was not established because the Claimants wanted the PPI policy and knew that its term was only five years.

In Saville v Central Capital Limited [2014] EWCA Civ 337 the Court of Appeal held that the judge’s approach shifted responsibility for assessing whether a policy is suitable from the intermediary, where it belongs, to the customer, where it does not. The Defendant should have elicited the genuine demands and needs of the Claimants by means of an open and fair question. The Claimants would have answered that they wanted insurance for the full term of the loan with the result that the policy would not have been sold. Sir Stanley Burnton also observed that where an allegation is fairly raised by a consumer it is for the intermediary to prove compliance with the rules and that the particular policy sold was suitable.

Jonathan Butters was instructed by Kevin Durkin and Adam Hizzett at Michael Lewin Solicitors, Leeds

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