The married couple who challenged Black Horse in the courts after discovering the vast majority of the cost of a PPI policy premium they had purchased was commission have given up their legal challenge and withdrawn their appeal to the Supreme Court.
The news will come as a blow to the claims management industry, potentially diminishing the rich pool of grievances that has fuelled their notoriously predatory business over recent years.
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Black Horse lent the Harrisons £60,000 and sold them PPI for £10,200, the commission on which was 87% of the premium. The Harrisons claimed this was unfair. However both the High Court and the Court of Appeal ruled otherwise, in favour of the lender.
Russell Kelsall, senior associate at solicitors Squire Sanders says that this area of the law is now clear. He said: If a lender or intermediary has failed to disclose either the existence and/or the amount of any commission, this does not create any unfairness in the relationship between the parties within the meaning of Section 140A of the Consumer Credit Act 1974
If there is a claim against a lender or intermediary alleging that the payment protection insurance was expensive or overly costly, this claim must fail."
Lord Justice Tomlinson in the Court of Appeal had decided that an intermediary is under no obligation to advise a borrower that the same cover could have been obtained more cheaply elsewhere.
The judge also stated that charging a high price for a product which is freely and readily available more cheaply in the market would be met with incomprehension in any other context.
