AXA France IARD SA v Santander Cards UK Ltd [2025] EWHC 1881 (Comm) (25 July 2025)

Executive Summary

The case concerns historic mis-selling of Payment Protection Insurance (PPI) policies sold before 14 January 2005 by predecessors of AXA France IARD SA (insurer) and Santander Cards UK Ltd (credit lender).
AXA bears nearly £500 million in redress costs plus £70 million in Financial Ombudsman Service (FOS) fees and administrative expenses for pre-2005 policies, while Santander assumes full liability for post-2005 sales under FSMA regulations.
AXA seeks recovery from Santander based on a 2015 Settlement Agreement, an indemnity clause in a 2000 Agency Agreement, contribution under the Civil Liability (Contribution) Act 1978, or negligence claims.
Santander counters with claims for £7 million profit-sharing deductions and potentially £151 million paid directly to customers if contribution liability applies.
The dispute highlights complex regulatory and corporate history, with Santander handling complaints under a Claims Handling Agreement (CHA) for AXA since 2017.

No direct sanctions imposed, but regulatory frameworks (FSMA) effectively shifted liability for PPI mis-selling post-2005 to credit lenders like Santander.
AXA’s indemnity claim references contractual obligations potentially impacted by regulatory compliance and liability allocation.
The case underscores the financial and legal risks arising from regulatory sanctions on financial services intermediaries.

Legacy liabilities from historic mis-selling remain significant, with ongoing disputes over indemnity and contribution increasing litigation exposure.
Handling of customer complaints via third-party agreements (CHA) creates operational and reputational risks.
Potential for further regulatory scrutiny on insurance mediation and credit lending practices, especially regarding historic product sales.
Time-bar limitations restrict some claims but do not eliminate substantial unresolved liabilities.

The case involves major financial institutions from France (AXA) and the UK (Santander), reflecting cross-border regulatory and commercial complexities.
UK’s FSMA regulatory regime plays a pivotal role in liability allocation post-2005, highlighting differences in national regulatory approaches.
The litigation outcome may influence transnational insurance and credit market practices, with implications for US and broader Western financial regulatory standards.
The involvement of UK courts and regulatory bodies reinforces London’s role as a key jurisdiction for financial services disputes.

Total industry redress for PPI mis-selling exceeds £38 billion, with AXA’s share for pre-2005 policies near £500 million plus £70 million in FOS fees.
AXA has paid over £120 million to Santander under the CHA for complaints handling, which is not recoverable.
Santander’s potential liability exposure includes £151 million in direct customer payments plus profit-sharing adjustments.
The case illustrates the substantial economic impact of historic mis-selling on insurers and credit lenders, affecting profitability and capital reserves.

Financial institutions should conduct thorough reviews of legacy product liabilities and contractual indemnities to mitigate ongoing exposure.
Strengthen compliance and documentation practices to prevent future disputes over regulatory responsibilities and indemnities.
Consider renegotiating or clarifying claims handling agreements to reduce operational risks and costs.
Monitor regulatory developments in the UK, France, and the US for evolving standards on insurance mediation and credit lending.
Prepare for potential reputational management challenges arising from historic mis-selling litigation and regulatory enforcement.

---

**Source Notes:**

Case Title: *AXA France IARD SA v Santander Cards UK Ltd [2025] EWHC 1881 (Comm)*

Link: https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/1881.txt