Supreme Court ruling extends PPI court claim time limit

The time limit for bringing a court claim over mis-sold payment protection insurance (PPI) now runs for six years from the end of the underlying credit agreement, such as a credit card or loan, rather than from the end of the PPI policy itself, following a Supreme Court ruling¹. The original time limit for making a court claim was six years from when the PPI policy ended¹.

PPI is an insurance product that was sold alongside credit cards, loans and other financial agreements in case you were unable to make payments¹. In a large number of cases it was mis-sold, and consumers were able to claim back mis-sold PPI payments, but the deadline for that was August 2019¹.

Claims to a lender or through the Financial Ombudsman remain possible only in exceptional circumstances, such as serious illness or a technical issue that prevented a claim before the August 2019 deadline¹. Where those circumstances do not apply, a claim can be made through the county courts, which the ruling says will likely involve more money and time than it is worth due to how complex the law is in this area¹. A claim can also be brought through a solicitor on a no-win no-fee basis, where the solicitor takes a cut of whatever is claimed back¹. Which? notes that if someone has known about their right to make a PPI claim for a long time but chose not to take any action during that time, the court would be unlikely to make an order in their favour, despite the extended timeline¹.

Which? sets out the circumstances in which a PPI sale is treated as mis-sold¹:

Mis-selling circumstances
The PPI was optional and this was not made clear
Significant exclusions under the policy were not explained
It was not clear the insurance had to be paid for upfront in one single payment
The PPI was paid as a single payment and it was not clear the cost would be added to the loan and that interest would be paid on it
The loan or finance agreement lasted longer than the PPI, and it was not clear the insurance would run out before the loan or finance agreement was paid off
PPI bought after 14 January 2005 without a "demands and needs statement" showing why a particular policy had been recommended

"a new ruling means you now have six years from the end of your underlying credit agreement, such as your credit card or loan"

Which?, Can you make a PPI claim again?¹

Which? also reports that legal firm Harcus Parker currently has a collective proceedings claim on mis-sold PPI, concerning high levels of secret commission, known as Plevin¹. It adds that in the run-up to the Supreme Court ruling it has seen claims management companies working with marketing brands to send texts addressing people personally and claiming they are owed thousands of pounds in PPI, including one that said: "Your refund of up to £5389 is un-claimed. Tax was taken from past PPI/Loans and is owed back."¹ Some of these companies can take large cuts from what is recovered, while others may be looking to obtain personal data, and some people have said these companies collected tax refunds on their behalf without prior contact¹.

Why it matters for households

The change affects people who were sold PPI alongside a credit card, loan or other financial agreement and who have not yet brought a court claim. For them, the period in which a county court claim can be brought is now measured from the end of the credit agreement rather than the end of the insurance policy, which in many cases falls later¹. The August 2019 deadline for claims to lenders and the Financial Ombudsman is unchanged, and claims through those routes remain limited to exceptional circumstances¹. A court claim carries costs and complexity, and the court may decline to make an order where a person knew of their right to claim but took no action for a long time¹. The Plevin collective proceedings run separately from individual claims¹.