26
Jun 2018

Landmark Plevin PPI Judgment

Landmark Plevin PPI Judgment

Doran v Paragon Personal Finance

Following on from the Supreme Court ruling in Plevin v Paragon Personal Finance Ltd, another case brought by Doran v Paragon Personal Finance Ltd (Paragon) was heard at Manchester County Court on 26 June 2018. The case involving a couple, Christopher and Joanne Doran, revolved around the issue of commission paid.

Mr and Mrs Doran borrowed £40,500 from Paragon in June 2004; £30,000 was for a personal loan and the remaining £10,500 was for a PPI policy. Paragon received £7,985.46 of the £10,500 PPI premium by way of commission and profit share from the insurer, meaning that 76% of the premium the Doran’s paid was not for their protection.

The Dorans acknowledged that they may have been aware that Paragon would receive some commission but they were not informed that only 14% of their PPI premium went towards paying for the policy.

The Dorans’ argument was similar to Susan Plevin’s in Plevin v Paragon, in that they believed that Paragon’s failure to disclose the high level of commission earned from their PPI policy created an unfair relationship. The Doran’s maintained that they would not have entered into the PPI policy had they been made aware of the amount of commission.

District Judge Pearson agreed that Mr and Mrs Doran would not have taken out the PPI policy had they known how much the level of commission was.

When handing down judgment on 26 June 2018 the Judge stated:

Without disclosure of the level of commission, the person in the position of the Claimants has simply no way of knowing that most of the money which they think they are paying to obtain the benefit of a PPI policy is in fact going to the lender.”

You can read the full judgment online, here: https://www.hlinsurancelaw.com/files/2018/07/Doran-v-Paragon-Personal-Finance-26.06.2018.pdf

By way of remedy, District Judge Pearson directed that Paragon refund the Dorans for the full amount of PPI premiums paid, plus contractual interest and 1% compensatory interest, totalling £17,345.27.

It was thought that Paragon would appeal the case as the approach adopted by the Judge in awarding the full amount of PPI premiums paid rather than only the amount of the PPI premiums that was commission was at odds with other cases, however, in November 2018 Paragon confirmed that they were not intending to appeal the ruling.