Genworth Financial has issued a statement after the UK Court of Appeal granted Santander permission to appeal a High Court ruling that found the bank liable for losses linked to the historic mis-selling of Payment Protection Insurance (PPI) policies.
The case stems from a dispute between Santander and several AXA group companies over PPI policies underwritten by entities originally owned by Genworth. The policies were sold through a business acquired by Santander in 2009. After AXA purchased Genworth’s PPI-related operations in 2015, it inherited the liabilities associated with mis-selling complaints and later sought to recover losses it said were attributable to Santander’s conduct.
In July, the High Court ruled in AXA’s favour, ordering Santander to pay around £680 million (US$911 million) in damages, interest, and costs. The court determined that Santander was responsible for the mis-selling-related losses that had arisen from complaints about the PPI policies in question. Santander subsequently applied for permission to appeal, which the Court of Appeal has now granted.
The appeal process is expected to take 12 to 18 months. The outcome will determine whether Santander remains liable for the substantial compensation awarded to AXA, which could, in turn, affect Genworth’s entitlement to a share of any recovery under prior agreements with the claimants.
Genworth noted that any potential recoveries from the litigation have not been factored into its capital allocation plans. Should proceeds arise, the company said they will be directed toward its strategic priorities: investing in growth through CareScout, returning capital to shareholders via buybacks, and selectively reducing debt.
The case represents one of the largest remaining legal disputes stemming from the UK’s long-running PPI mis-selling scandal, which has already cost banks and insurers more than £38 billion in refunds and remediation. The appeal ruling is expected to be closely followed by insurers with exposure to legacy financial product liabilities and those involved in similar recovery or indemnification claims.
