By Kirstin Ridley
LONDON (Reuters) - A test case about loan insurance (PPI) can go ahead because a British bank deliberately concealed a 95%-plus commission for years, the UK Supreme Court ruled on Wednesday, opening the way for 26,000 similar claims.
Senior judges unanimously dismissed an appeal by Canada Square (NYSE:SQ) Operations, ruling that a limitation period of six years, in which such claims have to be brought, only began after a customer was told about the hefty commission in 2018.
"Canada Square deliberately concealed these facts from Mrs (Beverley) Potter by consciously deciding not to tell her about the commission," Judge Robert Reed said in the written ruling.
It was a "test case on which around 26,000 other claims depend", he told the court.
A spokesperson for Citigroup - which owns Canada Square, formerly known as Egg Banking - declined to comment.
British banks have already paid around 40 billion pounds ($50 billion) in compensation to customers for mis-selling payment protection insurance (PPI) policies, most of which were sold between 1990 and 2010 and have become the country's costliest scandal in financial services.
The case, which allows a claim to be brought over a loan dating back to 2006, comes after Royal Bank of Scotland (LON:NWG) last month lost an appeal over unfair PPI-related commissions.
"Today's judgment ... will, undoubtedly, send shockwaves through the banking community," said Kerri Wilson, a senior associate at law firm Ontier.
"This landmark decision may allow other claims, which may have otherwise been considered out of time, to be brought before the courts and allow potential claimants to seek redress for mis-sold PPI policies."
($1 = 0.8014 pounds)