PPI deadline challenge has little chance of success

©We Fight Any Claim

The claims management company (CMC) announced at the time of the deadline's introduction that they would fight the FCA's March decision, which they described as a "tyranny" unfairly penalising those who have yet to make a claim for PPI mis-selling compensation.

And now they've officially applied to the High Court for a judicial review to be undertaken, arguing in their witness statement that "20 million people [eligible to complain] have not yet complained," and that there remains "evidence of persistent, systemic rejection of complaints" at banks.

However, as hopeful as this news may be for anyone who'd be likely to claim for compensation beyond the current August 29th 2019 deadline, it's worth noting that Ministry of Justice figures reveal how most applications for judicial review are unsuccessful.

The PPI scandal

In the first week of March, when the FCA's decision was first announced, We Fight Any Claim (WFAC) were quick to criticise it.

Writing at the time, they said they "strongly" believe that the "FCA's proposals are unjust and unlawful", since they will arbitrarily limit the amount people wrongly sold payment protection insurance can claim.

Their legal adviser and spokesperson, Mark Davies, said, "Unless these proposals are challenged, the only winners will be the banks and card providers who sold this toxic product. Millions of ordinary people, many of whom are not even aware they were sold PPI, will lose out".

And just in case the High Court weren't already aware, WFAC also outline the full scale of the PPI mis-selling scandal in their application, reminding the court that "the FCA has now stated that they believe that between 52m and 64m policies were sold to 30m people in the UK".

They also note that, on the basis of data from the Financial Ombudsman, the sale of such policies generated between £57 billion and £70 billion for the UK's big banks, who sold PPI premiums predominantly between 1995 and 2010.

So far, the banks have paid out over £20 billion in compensation to over 10 million people, yet WFAC believe "there is still a potential c£65bn of redress claims outstanding".

Ultimately, this is why they think there shouldn't be a deadline for claims, and it's why they're challenging the FCA's decision to set a deadline, despite the FCA believing that the latter is necessary to "draw a line" under one of the biggest scandals in modern banking history.

Will they win?

Yet even though WFAC have said "we believe we will win," the sobering fact is that most judicial reviews don't in fact succeed.

As the Ministry of Justice (MoJ) explain in statistical bulletin published last year, only 77% of applications made in 2015 for a judicial review reached even the permission stage, which is when a judge decides whether to allow a review to go ahead.

And of all the applications made in 2015, only 13% proceeded to a full judicial review, underlining the possibility that WFAC may not even have one granted by the High Court.

More worryingly, the MoJ state that only 2% of all cases lodged in 2015 went to a final hearing and were decided in favour of the claimant, giving WFAC precisely this probability of success, all other things being equal.

However, it has been pointed out that this low percentage is largely the product of how the MoJ tally their figures, with the ministry reportedly including cases that were still undecided among those which had failed to go to a final hearing and/or receive a positive judgement.

Taking this into account, it's worth noting that the number of final hearings held for applications made in 2015 was 608, and that of these 608 hearings, 81 - or 13.2% - were successful.

This is obviously higher than 2%, yet it's still fairly low, and suggests that WFAC will have their work cut out even if they have their application accepted.

Over £5 billion

And even if the claims company are successful in receiving a judicial review, and have the deadline either extended or removed completely, people who think they might be eligible for PPI mis-selling compensation should be reminded that they're generally better off claiming for themselves.

For example, MPs complained in May 2016 that, of £22 billion or so paid out by banks in compensation for mis-selling, around £5 billion had gone to CMCs.

And this is despite the fact that making a claim is something people can do entirely by themselves and entirely for free via the Financial Ombudsman Service.

As such, in the seemingly unlikely event that We Fight Any Claim are successful in their fight against the FCA, most people should probably think twice before accepting any offer from them to claim on their behalf.