Trust deeds and PPI??

angel5

Hi there,

I was wondering what happens if someone had a trust deed which is now completed, can they try to reclaim PPI on the accounts? If they had successful claims would the cheques still come to them?

Appreciate your help guys! Thanks!

NotEvanAPot

Handled as an asset if related to an account opened prior to agreement date, would be required to inform Inaolvency Practitioner or Accountant in Bankruptcy.

You won't be allowed to retain any payout, and severe penalties for doing so. Be aware that any financial institution that received a PPI claim would more than likely notify the IP or AiB immediately upon receipt.

coolcait

That's a very hot topic in the trust deed world right now!

Most trustees in a protected trust deed seem to have taken the view that once they have been discharged, the PTD has ended, so the PPI claims belong to the person who has been through the PTD.

Others have taken a different view and have been applying to the courts to be re-appointed as trustee/have the PTD re-opened. The amounts involved are a factor, as it costs money to get the PTD re-opened.

One claims company challenged the trustee, and the case was heard in the Court of Session a few months ago. The Lord Ordinary (judge) decided that the PPI refund didn't vest in the trustee, because the PTD had ended when the trustee declared that he had made a full and final distribution of assets.

The trustee appealed, and the appeal was heard by the Inner House of the Court of session last month. They agreed with the Lord Ordinary.

There are rumours that the trustee may make a further appeal, but that is not confirmed. ICAS, who regulate many Scottish IPs, have pretty much said that trustees should NOT be re-opening trust deeds for PPI, but it remains to be seen what happens - because the case revolved around the wording of the specific PTD.

To be fair, the wording doesn't look that different to the standard stuff for older PTDs (this was a PTD signed before 1 April 2008). A few years ago trustees were told that they had to check out PPI claims while the PTD was running, so that will probably put a different slant on those cases.

If you've got a taste for reading court judgements, go to the Scottish Courts website and search for Dooneen against Mond. If you've got a taste for drama, angst, and passionate rude and occasionally measured debate about the issue, there's a forum which is dedicated to trust deeds and has seen some spirited debate - with some helpful links.

Short answer to your question? There's still a question mark over the issue, but it seems to be edging towards the idea that when the PTD is closed, it's closed.

angel5

Thanks for the informative replies. Really appreciate it. Seems to be a lot of uncertainty of what 'should' happen in this case. Really interesting that it might be swinging towards once it's closed it shouldn't be reopened again. I'm actually unsure as to what to advise my friend to do who is in this situation. I doubt he would want the trust deed re-opened again. And I get that the banks obviously wouldn't want to pay out for miss-sold PPI when they received only a fraction of the bad debt they were due back. It's a tough one!! 🤔

coolcait

angel5 wrote: »

... I get that the banks obviously wouldn't want to pay out for miss-sold PPI when they received only a fraction of the bad debt they were due back. ..

Some of the banks will set off any PPI refund against the outstanding debt - so your friend would only get anything that was left over and above that.

There was another recent case where someone challenged this, but a Sheriff in one of the Sheriff Courts decided that the creditor did have the right to do it.

That case was brought back to court - Sheriff Appeal Court, I think - as the parties involved wanted it to be looked at again, and pretty much have it added onto the Court of Session appeal case which happened in July.

The Sheriff Appeal Court said 'No - you'll bring any appeals before this court". But now there are question marks over that one too, because of the recent Court of Session decision.

If your friend isn't up against any deadlines, it's probably best to wait for a month or so to see if any definitive new guidance comes out!