UK banks could face new multibillion-pound claims after PPI ruling.

Banks relied on a June 2019 ‘time-bar’ on claims, agreed with the FCA, as a way to cap the final cost in the biggest compensation exercise in UK financial history. Photograph: Bloomberg via Getty Images

Britain’s banks face the threat of a huge new PPI bill that could add billions of pounds to the £30bn already paid out in compensation, following a court ruling lauded by claims management companies as “hugely significant”.

The case opens the door to a renewed claims bonanza as it suggests that even if the PPI policy was not mis-sold, the buyer may still be able to reclaim because the scale of the commissions paid were excessively high.

While the ruling does not mean any more cash for people who have already received compensation, it may allow cases that have been rejected to be reconsidered. The ruling is likely to be appealed against but if it stands it presents a fresh PPI nightmare for Britain’s banks, after one claims expert said new payments could run into the tens of billions. Lloyds Bank has so far paid out £18.8bn for mis-selling claims, while Barclays has paid more than £9bn and RBSnearly £5bn.

Full story at Yahoo News.

By Patrick Collinson and Miles Brignall.