Banks could be forced to pay out billions more in Payment Protection Insurance (PPI) claims following a decision in the Supreme Court that opens the door to historic claims.
The ruling, handed down on Wednesday, has created an opportunity for claims dating back beyond the usual six-year limitation period, provided claimants can show an ongoing relationship with their bank.
It comes just days after law firm Harcus Parker launched legal action for a new wave of PPI claims based on banks and credit card companies secretly charging their customers high levels of commission.
Damon Parker, senior partner at Harcus Parker, said: “This Supreme Court judgment could not be more timely.
“Bank and credit card customers are still owed billions of pounds after they were secretly charged up to 95 per cent commission when they took out PPI.
“The judgment ensures that millions more people can make PPI claims and recoup sums that should never have been charged by banks.”
Banks have paid out an estimated £38 billion in PPI claims over the last 20 years. This new group legal claim, which is based on breaches of the Consumer Credit Act, is estimated to be worth up to £18 billion.
Mr Parker added: “Our group legal claim will be open to customers who have previously claimed but were refused compensation, those who did not recoup all of their losses, and customers who have never made a claim.
“Because these claims are about secret commissions, potential claimants will not know they are affected unless they check.”
He is urging anyone who thinks they might have a claim – essentially, anyone who had a credit card in the past – to fill out a form on the firm’s claims website (www.ppiglo.com) to check if they are eligible.
Royal Bank of Scotland has been fighting the Smith & Burrell case, as it’s been coined, for more than four years in a bid to block fresh PPI claims.
The bank lost the original case in the County Court, then lost again at the High Court, before prevailing at the Court of Appeal.
Wednesday’s Supreme Court judgement will be final and will bind all future PPI cases.
Mr Parker continued: “RBS and other banks have thrown millions of pounds at defending these cases, swamping claimants in costs and making them extraordinarily difficult to pursue.
“It is for this reason we have launched our group legal claim. We believe the only way to pursue these matters is to group them together, sharing costs and expertise, to bring one overarching claim which deals with all PPI claims once and for all.”
