On 26 September 2024, the Court of Appeal handed down judgment in the joined appeals in Harrop v Skipton Building Society and Self v Santander Cards UK Limited.  The judgment contains important guidance both on the finality of settlement agreements in PPI claims and on the application of s.140A of the Consumer Credit Act 1974 to settlement agreements.

The appeals, in both cases brought by a claimant who had been unsuccessful before the lower courts, involved a challenge to settlements of Plevin-type undisclosed commission claims under s.140A arising from the sale of payment protection insurance policies.  In response to the Supreme Court’s decision in Plevin v Paragon Personal Finance, the FCA had established detailed rules guiding financial institutions on how they should respond to undisclosed commission claims arising from PPI policies and setting out on what basis redress ought to be offered.  In both Harrop and Self, the claimants had accepted offers of redress determined in accordance with the FCA’s rules.  The redress was offered in full and final settlement of claims in respect of undisclosed commission.

The claimant in Harrop subsequently brought a claim under s.140A by which he attempted to re-open the settlement which he had previously reached.  He did so by arguing that there was no valid consideration for the settlement agreement because Skipton was under an existing obligation under the FCA rules to pay redress to him.  He also argued that, even if the settlement agreement was binding on him, it should be re-opened by the Court under s.140A because it did not fully resolve the unfairness in the relationship between him and Skipton.  These grounds of challenge had implications for the finality of every such settlement of a PPI claim reached by financial institutions in accordance with the FCA’s rules.

Skipton successfully applied for Mr Harrop’s claim to be summarily dismissed and upheld the dismissal on a first appeal.  Mr Harrop obtained permission to appeal to the Court of Appeal and his appeal was heard together with the subsequent appeal in Self v Santander which raised the same issues.  Both appeals were dismissed by the Court of Appeal.

Skipton Building Society was represented in the Court of Appeal by Giles Wheeler KC and Christopher Monaghan, instructed by Steve Walpole of TLT LLP.

The judgment can be found here.