Manchikalapati & Ors., R (on the application of) v Financial Services Compensation Scheme
A valid claim under the FSCS scheme includes claims integrally connected to the protected liability, not limited to liabilities strictly arising under the contract of insurance. Litigation costs and judgment interest incurred to recover benefits under protected insurance contracts are compensable as they are 'in respect of' the protected liability, meaning sufficiently connected to it. The FSCS's refusal to compensate for costs and interest was unlawful.
- Parties
- Claimant: Mr Rajendra Manchikalapati and Mrs Sowjanya Manchikalapati; Claimant: Mr Paul Montgomery; Claimant: Mrs Beverley Goldman; Claimant: Mr Bharatkumar Shah and Mr Dineshkumar Shah; Claimant: Mrs Emma C Emin; Claimant: Mr Clive Allen and Miss Jane Whale; Claimant: Mr Sebastian Green as executor of the estate of Ms Wendy Green; Claimant: Mr Stuart Mills; Claimant: Mr Grant Sugarman; Claimant: Mr Michael Kennedy and Adam Trutwein; Claimant: Mr Denis Tarasov; Claimant: Mr Adrian Nicholas Bartlett; Claimant: Miss Sarah Horley; Claimant: Aktimon Limited; Claimant: Mr David A Kraftman; Claimant: Dr Obori Ikpeme; Claimant: Mr Grant Gledhill and Darren Bell; Claimant: Dr Martin and Dr Katherine Spadaro; Claimant: Mr Roger Creber and Mrs Jeanie Creber; Claimant: Mr Syed Adnan Hussain; Claimant: Mr John Martin Dickie and Ms Alexandra Dickie; Claimant: Mr Harold Roberts and Mrs Jane Roberts; Claimant: Ms Anjali Bedi; Claimant: Suchira Tanti Apichart; Claimant: Mr Sayad Asad Hussain and Iram Fatima Husain; Defendant: Financial Services Compensation Scheme
- Jurisdiction
- England and Wales
- Judgment Date
- 02 August 2022
- Procedural Posture
- Judicial Review / Final Judgment
- Outcome
- Application for judicial review allowed; FSCS decision quashed.
- Legal Topics
- Statutory Interpretation, Policyholder Protection, Compensation Scheme, Building Guarantee Insurance, Judicial Review, Compulsory Insurance, Contractual Liability
Case Brief
Summary, issues, holding and outcome
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Parties
Mr Rajendra Manchikalapati and Mrs Sowjanya Manchikalapati
Claimant
Mr Paul Montgomery
Claimant
Mrs Beverley Goldman
Claimant
Mr Bharatkumar Shah and Mr Dineshkumar Shah
Claimant
Mrs Emma C Emin
Claimant
Mr Clive Allen and Miss Jane Whale
Claimant
Mr Sebastian Green as executor of the estate of Ms Wendy Green
Claimant
Mr Stuart Mills
Claimant
Mr Grant Sugarman
Claimant
Mr Michael Kennedy and Adam Trutwein
Claimant
Mr Denis Tarasov
Claimant
Mr Adrian Nicholas Bartlett
Claimant
Miss Sarah Horley
Claimant
Aktimon Limited
Claimant
Mr David A Kraftman
Claimant
Dr Obori Ikpeme
Claimant
Mr Grant Gledhill and Darren Bell
Claimant
Dr Martin and Dr Katherine Spadaro
Claimant
Mr Roger Creber and Mrs Jeanie Creber
Claimant
Mr Syed Adnan Hussain
Claimant
Mr John Martin Dickie and Ms Alexandra Dickie
Claimant
Mr Harold Roberts and Mrs Jane Roberts
Claimant
Ms Anjali Bedi
Claimant
Suchira Tanti Apichart
Claimant
Mr Sayad Asad Hussain and Iram Fatima Husain
Claimant
Financial Services Compensation Scheme
Defendant
Procedural Posture
Judicial Review / Final Judgment
Legal Issues
- 1 Whether FSCS must compensate claimants for litigation costs and judgment interest under the Policyholder Protection Scheme
- 2 Interpretation of 'in respect of' in the PRA Rulebook and statutory scheme
- 3 Whether costs and interest are compensable as protected claims or claims owed under a contract of insurance
Ratio Decidendi
A valid claim under the FSCS scheme includes claims integrally connected to the protected liability, not limited to liabilities strictly arising under the contract of insurance. Litigation costs and judgment interest incurred to recover benefits under protected insurance contracts are compensable as they are 'in respect of' the protected liability, meaning sufficiently connected to it. The FSCS's refusal to compensate for costs and interest was unlawful.
Court Disposition
Application for judicial review allowed; FSCS decision quashed.
Orders
- Declaratory relief granted in favour of claimants.
- FSCS decision dated 6 May 2021 rejecting claims for costs and interest quashed.
Full Case Text
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