Supreme Court rules on limitation in PPI case

In the case of Smith and another (Appellants) v Royal Bank of Scotland (Respondent) [2023] UKSC 34, the Supreme Court has ruled that the claims made by claimants seeking orders under the Consumer Credit Act 1974 were brought in time in the county court.


Two claimants, Ms Karen Smith and Mr Derek Burrell, each had a credit card issued by RBS and were sold PPI by RBS. Ms Smith and Mr Burrell were not told by RBS that most of money paid by them for PPI did not go to the insurer but was retained by RBS as commission. It is known that the commission received by RBS was well over 50% of the payments made.

After FCA established a scheme for PPI mis-selling, RBS offered Ms Smith redress in 2018 and Mr Burrell 2017. It was only at this point that RBS informed them that it had received commission. At this point, Ms Smith had ended her PPI agreement (in 2006) and credit card agreement with RBS (in 2015). Mr Burrell had ended his PPI agreement (in 2008) but his credit agreement continued until 2019.

They both brought claims in the county court seeking an order under s 140B of the Consumer Credit Act 1974 for RBS to repay all the money paid by them for PPI less any redress paid already, plus interest. In Mr Burrell’s case, the district judge ruled that the claim was brought in time and Ms Smith’s case also succeeded. The decisions were upheld by the county court judge on appeal. On a further appeal, the Court of Appeal ruled in favour of RBS, however, stating that the relevant time limit for bringing a claim had expired before the claim had been brought. Both then appealed to the Supreme Court.


The Supreme Court held that both claims were brought before the relevant time limit expired.

RBS did not argue that the failure to disclose the commission it received was unfair to the claimant, but instead that the cause of action accrued when each of PPI payment was made. In Ms Smith’s case, the last PPI payment was made April 2006. For Mr Burrell is was made in March 2008. As the claims were brought in 2019, the 6 year limitation period set out in s 9 Limitation Act 1980 had long expired.

The Supreme Court rejected this, as they ruled that the right to claim a remedy depends on whether the relationship between the creditor and the debtor, arising out of the credit agreement between them, was unfair to the claimant at the time when the relationship ended. Therefore, the cause of action did not accrue until the credit relationship ended in 2015 (for Ms Smith) and 2019 (for Mr Burrell).

RBS also argued that, though the credit relationship continued after the last PPI payment was made, when PPI payments were stopped the relationship was no longer unfair. This is where the Court of Appeal and the Supreme Court rulings diverge. The Court of Appeal held that there was no financial effect of the PPI agreement after the last PPI payment was made, so the relationship was not unfair when it ended in 2015 (for Ms Smith). The Supreme Court rejected this.  It held that the credit relationship was still unfair because RBS did not repay the sums which had been paid for PPI cover, which was deemed a persisting economic effect. RBS also did not disclose to her that they received commission from those payments. The same was true for Mr Burrell.

The Supreme Court explained that the fact that the 6 year period for bringing a claim does not start to run until the end of the credit relationship does not unduly expose creditors to stale claims. The Court has discretion as to what remedy to grant depending on the facts of the case.

Scott Nodder