New PPI legal action: Could you reclaim £1,000s?

If you had a loan, credit card or car finance (among others), new legal action is pushing for further PPI payouts

A new 'no win, no fee' group legal claim – the biggest of its kind – has launched, aiming to recoup £18 BILLION in payment protection insurance (PPI) premiums. It's free to join and, if successful, could be worth £1,000s to claimants – including some who've already been paid back mis-sold PPI. But that's not guaranteed and joining the 330,000+ people who've signed up isn't 100% risk-free. Here's what you need to know.

What's this new PPI claim about?

First, here's a brief background on PPI...

PPI, or 'payment protection insurance', refers to an insurance policy that for decades was sold to customers who took out loans, credit cards, store cards, catalogue accounts, overdrafts and car finance.

Around 65 million policies were taken out – mostly between 1990 and 2011 – though the product was widely mis-sold.

As a result, between 2011 and 2019, banks repaid customers more than £38 billion in compensation for mis-sold PPI. MoneySavingExpert.com and its founder Martin Lewis were at the heart of the campaign to encourage people to reclaim before the August 2019 deadline – helping people reclaim over £10 billion without giving a penny away to a claims firm.

Since then, the door to complain about PPI and get compensation has effectively been slammed shut, as launching a legal claim is now the only way of potentially clawing your money back.

This new group claim is about high levels of secret PPI commission

Legal firm Harcus Parker is attempting to launch a new group legal claim - on a no win, no fee basis - to recoup £18 billion in PPI premiums it believes are owed to six million people.

Legal firm Harcus Parker is attempting to launch a new group legal claim – on a no win, no fee basis – to recoup £18 billion in PPI premiums it believes are owed to six million people. 

Specifically, this is about high levels of secret commission known as Plevin (see point 2 below for more on this). In some cases, it's believed lenders charged up to 80% commission on PPI sales, and Harcus Parker says this should be repaid to consumers in full.

More than 330,000 have signed up so far, and Harcus Parker hopes that strength in numbers will convince banks and credit card companies to come to a settlement – failing that, a group claim is thought to be a more viable legal route.

All this means a relatively straightforward, low-cost way of complaining about PPI could be about to be back on the cards (albeit not 100% risk-free). Below we explain how it works. First though, a word from Martin:

Martin: This lawsuit may well be re-opening the door to PPI

PPI mis-selling is the UK's single biggest financial scandal in living memory. The public bought tens of billions of pounds of dud products, yet no one was ever prosecuted.

Huge financial institutions scripted their staff to rip customers off, selling them insurance that was either useless or terrible value (a payout rate of less than 10% of the cost) via confusing marketing.

I started warning about PPI almost as soon as I started MoneySavingExpert, and got involved with helping people reclaim not long after in the mid-noughties, first with template letters and later free tools. The banks pushed hard to close it down at the Financial Ombudsman, so they could get some 'clarity for their balance sheets', and sadly, even though MSE and Which? teamed up to try and fight this off, they won.

This was outrageous, as it was not long after the Plevin court decision. That decision meant people were due money even if they hadn't been mis-sold if, as was common, commissions were outrageously high and this wasn't made clear. That closure after such a massive court ruling was against natural justice. It meant there wasn't enough time or publicity for people to get Plevin claims done.

This lawsuit may well be re-opening the door to that. The shame is that it now takes a big law firm to do it, and it will take a cut of up to 35%, meaning people won't get all that they are owed. Not the law firm's fault – it's the regulator and government that agreed to close PPI down.

Eight PPI group claim need-to-knows

Law firms' marketing can sometimes make signing up look like a no-brainer. But it's important to note that, as with all legal action, there are pros and cons to weigh up.

Here are the main points to consider...

  1. Bringing your own legal claim is now VERY difficult, so this may be your best bet if you think you're owed

    As the PPI reclaim window closed in 2019, lenders and the Financial Ombudsman will now only consider a PPI complaint if you've got a serious, exceptional reason for not doing so before the deadline.

    Effectively this means the only way to start a new claim has been to go through legal channels: either on your own or as part of a group.

    Launching an individual legal claim over PPI is typically complex, slow and difficult, something not made any easier by the financial might of lenders. So if you were to try to bring a claim yourself, the costs could easily dwarf any damages – plus you'd risk having to pay the other side's legal costs. Individual claims are normally made in county courts, where judges aren't bound by previous decisions.

    Therefore, while we'd normally urge you to steer clear of firms that take a cut of any compensation, in this instance if you do want to complain about PPI, then joining a large group legal action is arguably your best bet – and that's where Harcus Parker comes in.

    But even then, there's no guarantee of winning, so don't sign up until you've carefully considered all the points in this guide.

    Quick question

    • Can I wait until this claim has concluded and then get compensation myself?

      The idea behind this is that you would wait until the existing claim has run its course and then use any court judgment against a lender as a precedent to make a claim yourself – avoiding law firms and their fees altogether.

      But if you're considering it, there are two important points to bear in mind first:

      1. This claim might be settled out of court. If that happens, no legal precedent would be set, meaning you'd have to start from scratch with your claim and would run into the same set of issues listed above.

      2. Any new claim might be 'out of time'. Legal claims are often subject to strict time limits known as 'limitation periods', meaning there are deadlines for when claims can be brought.

        For example, where there's been a breach of contract, you normally have six years from the breach to bring a claim. Since this PPI claim is likely to take at least 18 months, if not longer, to play out in full, there will likely be some claims that won't be possible in the future.

      Ultimately though, without a crystal ball, it's impossible to know whether it would be better to join the Harcus Parker claim or wait. And there are no guarantees either way – so if you think you have a case, you'll need to decide which approach to take.

  2. This claim is about high levels of secret commission – commonly known as 'Plevin'

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    This new claim is about a specific form of mis-selling, commonly called the 'Plevin' argument (named after the legal case it's based on). It relates to high levels of commission, sometimes in the region of 80%, taken from PPI sales – usually without the customer's knowledge.

    Following the Plevin case in 2014, the reclaim floodgates opened as the court ruling basically meant that anybody who got PPI with a loan or credit card from a bank or building society was likely mis-sold.

    Plevin meant that if more than 50% of your PPI's cost went as commission to the lender (or the lender and the broker/adviser together), as was common, and that wasn't explained to you, you were due back the extra above that. Many people accepted offers from lenders to refund the amount of PPI commission above 50%, something known as 'tipping point' offers.

    HOWEVER, as part of this new group claim, Harcus Parker is arguing that PPI commission should be paid back in FULL. This includes people who accepted tipping point offers, as well as those who either didn't know they had PPI, or knew they had it but had a claim rejected.

  3. Eligibility criteria to join the claim is broad

    Here's the eligibility criteria you'll need to fulfil to join Harcus Parker's group claim.

    You MUST:

    • Have had a loan, credit card, store card, catalogue account, an overdraft, or car finance in the past. This could be with any lender.

    AND one of the following three criteria also needs to apply:

    • You've never made a PPI claim before. This includes if you don't know whether you had PPI or not. If you're unsure, Harcus Parker can check for you. OR...

    • You have made a previous PPI claim, but it was rejected. OR...

    • You've previously accepted a 'tipping point' offer. In other words, you accepted partial compensation on the basis of having not been told about high levels of PPI commission. 

    HOWEVER, you WON'T be eligible to join the claim if either of the following apply:

    • In the past, you've been successful in making a complaint about Plevin. This is different to having accepted a 'tipping point' offer – if you're unsure, check with Harcus Parker.

    • You have already been compensated in full for your PPI policy. This new group claim is about claiming full compensation, so there's no point you joining if you've already had this.
  4. Your claim can be against almost any lender in England, Scotland and Wales

    Harcus Parker has initially launched legal proceedings against eight banks and credit card companies: Barclays, Bank of Scotland, Black Horse, HSBC, Lloyds, MBNA, Santander and Santander Cards.

    However, it plans to start proceedings against ALL lenders that sold PPI. So you don't need to have been a customer of any of the above to join the group claim. In fact, your claim could be against ANY lender registered in England, Scotland or Wales.

    While living in Northern Ireland does not exclude you from this group claim, if your complaint is against a lender that was based in Northern Ireland at the time you took out the credit agreement, you won't be able to sign up.

    If you're unsure whether you're eligible to join the claim, check with Harcus Parker.

  5. There's no guarantee this will go ahead as one big group claim – either way, the case will last at least 18 months

    A judge first has to decide whether this PPI group claim can go ahead in the proposed format: in other words, in one big batch. This is set to be considered by a judge on Thursday 8 February 2024.

    Even if the group claim gets the green light, it'll still take a long time to proceed through the legal system. Harcus Parker estimates it'll take at least 18 months for a group claim like this to be resolved – and it may take much longer (possibly years).

    If the judge doesn't allow the group claim to proceed in its current format, it might have to be broken up into smaller claims, which will inevitably slow things down further.

  6. Signing up is free – but not 100% risk-free

    As this is a 'no win, no fee' legal claim, you won't have to pay anything upfront to join it.

    If you do join though and the claim's successful, a substantial fee of 35% (plus VAT) will be deduced from your payout, as well as your share of disbursements (such as insurance cover). If banks opt to settle out of court, a still large fee of 20% (plus VAT and disbursements) would be deducted.

    If a claim isn't successful, you're unlikely to have to pay anything, BUT it's not impossible...

    For example, if a court ruled in favour of the banks, you could technically be liable for its legal costs. In practice though, this would likely be covered by Harcus Parker's 'after the event' (ATE) insurance – in fact, Harcus Parker says it will be fully insured in the event it loses the case and potentially becomes liable for lenders' legal costs.

    In which case, the only situation wherein claimants could again be left liable is if that insurance were to fail – something that's unlikely but not impossible.

  7. Typical payouts are likely to be around £3,000 – but some could be much higher

    Harcus Parker says successful claims could be worth between £2,500 and £3,000 on average. This is how much you would receive, as this estimate already takes into account Harcus Parker's fee. However, some claims could result in much higher payouts than this – and of course some will be worth less too.

  8. There's no deadline to join the claim – but don't delay as you could still miss out

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    For now, there's no deadline to join this claim. That could change though, in which case we'll update this guide.

    That said, if you do think you've got a legitimate PPI complaint and are considering joining the group claim, don't delay as some cases could still be ruled 'out of time' by the court.

    That's because legal claims are subject to strict time limits, known as 'limitation periods', meaning there are deadlines for when claims can be brought. For example, where there's been a breach of contract, you normally have six years from the breach to bring a claim.

    So in the case of this PPI group claim, delaying signing up might cause an issue if your lender believes that, for at least six years, you've known about (or been aware of) the high level of commission you paid when purchasing your PPI policy.

How to join the PPI group claim

If you believe you were sold PPI and might have a complaint, it's easy to check your eligibility and join the group claim.

Simply enter a few personal details – such as your name, address, telephone number, and details of your lender and any relevant paperwork (if you have it, see below) on the Harcus Parker website – and it'll check your eligibility.

Had a relevant credit product but unsure if you were sold PPI? Again, Harcus Parker can establish this on your behalf. Simply register your personal details:

Check your eligibility on Harcus Parker's website

Important: If Harcus Parker thinks you're eligible, you'll be added to the group claim automatically, but it's possible to back out if you change your mind (see below). You'll also be notified if Harcus Parker doesn't think you're eligible to sign up.

What paperwork do I need?

You'll speed up how long it takes to check whether you've got a claim if you're able to provide Harcus Parker with any relevant documentation or paperwork related to the credit product.

For example, this could include the original credit agreement, a balance statement, or correspondence between you and the lender. If you've got this, Harcus Parker will be able to establish almost immediately if you've got a claim (in which case, you'll automatically be added to the group action claim).

Don't worry if you've binned this paperwork – something that's quite possible as these credit products were often taken out many years ago.

If so, Harcus Parker will carry out a 'data subject access request' on your behalf to establish which, if any, credit products you had and whether you were sold PPI. But it'll be reliant on the co-operation of your lender to establish if you had PPI, so it's hard to estimate how long this process could take.

There's a 14-day cooling off period

There's a 14-day cooling off period to withdraw from the claim once you've signed up.

You're still able to back out for free after this, but it comes with a risk – one that could grow the further along the claim is. Essentially, if your withdrawing from the claim happens at a stage where it destabilises the rest of the claim, you could become liable for a share of the legal costs.

If you want to back out of the claim after you've signed up, you'll need to email Harcus Parker at PPI@harcusparker.co.uk.

Important: only sign up if you genuinely believe you have a case

If you join this group claim, it will involve Harcus Parker making representations in court, such as signed statements of truth, on your behalf.

Where you submit information you know isn't true, such as an inaccurate statement, there's a risk that if the claim went to court then you or Harcus Parker could be held in contempt of court. So only sign up if you think you might be due PPI compensation.

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