Christine Self v Santander Cards UK Limited
[2024] EWCA Civ 1106
Manchikalapati & Ors, R (on the application of) v The Financial Services Compensation Scheme
5 September 2023
[2023] EWCA Civ 1006
Court of Appeal
People got insurance for building problems, the insurer went bust, and they couldn't get their court costs or interest back from the government's compensation scheme. The court said the rules only pay for things directly covered in the original insurance policy, not extra costs from going to court, even though it seemed unfair.
Key Facts
- •Appeal against a Deputy High Court Judge's decision granting judicial review against the Financial Services Compensation Scheme (FSCS).
- •FSCS refused compensation to policyholders for an insolvent insurer's failure to pay post-judgment interest and litigation costs.
- •Policyholders owned long leases in New Lawrence House, Manchester, insured by Zurich (liability transferred to EWIC).
- •EWIC paid the judgment debt but went into administration without paying VAT, statutory interest, or costs.
- •Policyholders sought compensation from FSCS; FSCS agreed to cover VAT but not interest and costs.
- •The High Court quashed the FSCS decision.
- •The appeal concerns the interpretation of the Policyholder Protection Rules (PPR) regarding the scope of compensable claims.
Legal Principles
Conventional principles of statutory interpretation apply, but with qualifications. Parliamentary intention is not the primary focus; instead, the intention of the PRA (rule-maker), read in light of FSMA, should guide interpretation.
Lady Justice Falk's judgment, paragraphs 33-35
The PPR should be construed as a whole, taking a holistic and iterative approach, considering its overall purpose and aiming for a practical and commercially sensible result.
Lady Justice Falk's judgment, paragraph 37
Explanatory notes (like the 2020 Statement) can assist in ascertaining the context and purpose of the provisions.
Lady Justice Falk's judgment, paragraph 38
The Barras principle (inferring legislative intent from previous judicial interpretation) may apply but its strength depends on contextual similarity and any differences in phraseology.
Lady Justice Falk's judgment, paragraphs 49-53
Outcomes
Appeal allowed; FSCS decision reinstated.
The PPR does not extend to costs awards and interest not owed under the policy itself, despite the hardship on the Policyholders. The court interprets "in respect of" as "for payment of", not broadly as "in connection with".
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