Santander has won a significant legal dispute with French insurer Axa over a £677 million liability related to the UK payment protection insurance (PPI) scandal, after the Court of Appeal overturned a previous High Court ruling. The Court of Appeal’s decision, delivered yesterday, reversed a 2025 judgment that had held Santander responsible for the bulk of losses Axa suffered in connection with PPI mis-selling.

The case centers on policies sold primarily before 2005, including some dating back to the 1970s, linked to retailer-branded store cards underwritten by insurance units originally associated with General Electric’s GE Capital Bank. Santander acquired GE Capital Bank in 2009, while Axa later took ownership of the insurance operations that issued these policies and assumed related liabilities.

Axa initiated legal proceedings in 2021, asserting that Santander was liable for the losses under a 2000 agreement between the parties. The High Court had previously found in Axa’s favor, but the Court of Appeal ruled that the agreement did not have retrospective effect, thereby exonerating Santander from those obligations.

In response to the ruling, Santander stated that Axa “will be required to repay the substantial majority of the amount previously paid” by the bank under the earlier judgment. Axa, meanwhile, said it was reviewing the decision and considering further legal recourse, including a possible appeal to the UK Supreme Court.

The broader PPI scandal involves insurance sold alongside credit cards, personal loans, and mortgages across the UK from the 1990s onwards. The product was intended to cover loan repayments if borrowers were unable to work due to illness or job loss. However, it became the UK’s largest financial services mis-selling controversy due to widespread consumer complaints about ineligibility, lack of awareness of the insurance’s existence, high costs, and restrictive claim criteria.

Firms faced around £50 billion in compensation and related costs as a result of the widespread mis-selling. Axa noted that the Court of Appeal’s ruling has only a minimal financial impact on its business, as most of its PPI mis-selling costs had already been reimbursed by Genworth, the insurance company spun off from GE in 2004. Genworth sold the two units responsible for the PPI liabilities to Axa in 2015.