Divisive lawsuit sees accused Genworth look to turn the tables on Santander
Insurer Genworth has blamed Santander after AXA launched a multi-million pound lawsuit against them.
In January, Axa filed a £31m lawsuit against Genworth, accusing it of failing to pay up for payment protection insurance (PPI) mis-selling losses.
Trouble began shortly after Axa purchased Financial Insurance Company Limited (FICL) and Financial Assurance Company Limited (FACL) from Genworth in September 2015.
AXA claims that when it sealed the acquisition, Genworth agreed to pay 90% of all forthcoming PPI-related claims, some going back many years when the mis-selling happened.
However, Genworth allegedly reneged on its promises, leading Axa to file a suit against it.
Genworth blames Santander
Now, Genworth has hit back in its defence and counterclaim, arguing that Santander is the one at fault and should be paying for the PPI mis-selling.
Genworth says Santander agreed to indemnify FICL and FACL by “any reason or omission by Santander”.
Santander letter reveals the root of the dispute
However, Santander wants to wash it hands of all PPI mis-selling claims before 2005, stressing it has “no liability”.
As of 31 August 2017, a letter from Santander reveals it would no longer compensate FACL or FICL, the court documents show.
The Santander letter also alleged that FICL and FACL had acted in breach of their agreement, and threatened to “seek to recover” reimbursements for what it had paid out, according to the court documents.
Genworth bites back
Genworth says that despite this letter, its former companies FICL and FACL should not be liable to Santander, and therefore Genworth is not liable to Axa.
It is therefore Santander’s responsibility to take on the fine, according to Genworth.
Genworth says that if it does decide to make any payment to AXA, Santander should fork out for the damages.
Genworth will also seek to recover its costs from Santander.
The case continues, with £31m currently at stake.
Genworth and Santander declined to comment. Axa has been contacted.