Axa France Iard SA & Anor v Santander Cards UK Limited & Anor

An indemnity for liability arising from an agent’s act or omission while performing duties under an agreement is ordinarily confined to conduct occurring when those contractual duties existed. The agreement must be construed as a whole, but commercial context and a desire for continuity cannot supply clear retrospective language where its provisions consistently operate prospectively.

For contribution under Civil Liability (Contribution) Act 1978, section 1 requires an extant liability that the person suffering damage could establish in an action when payment was made. Regulatory redress paid under a complaints scheme, including a Financial Ombudsman Service process, is not such a directly enforceable civil liability merely because a different future sequence of events might have produced one.

The respondents, successors to insurers of store-card payment protection insurance, sought an indemnity from the appellants, successors to the selling credit lender, for liabilities arising from historic mis-selling claims. A written Agency Agreement made on 1 December 2000 contained an indemnity for liability caused by the lender while performing its duties under that agreement.

Dias J held that the indemnity extended to liabilities arising from policies sold before the agreement and awarded approximately £677 million: [2025] EWHC 1881 (Comm). The appellants challenged that construction. The respondents cross-appealed, contingently, against the dismissal of their contribution claim under the Civil Liability (Contribution) Act 1978 in respect of regulatory redress paid to customers.

The central issues were whether the contractual indemnity was retrospective and whether regulatory redress created a liability in respect of the same damage for contribution purposes.

1. The appeal was allowed and the cross-appeal dismissed. The judgment on the contractual indemnity claim against the second appellant was set aside.

2. The Agency Agreement, construed objectively and as a whole, applied prospectively to sales and marketing. Clause 1.2 distinguished between future sales under existing or new schemes and the future administration of existing on-risk policies. It did not impose contractual obligations governing historic sales.

3. Clause 12.2 indemnified the insurers only for liability arising from an act or omission by GE-CB while performing duties under the agreement. Those duties, particularly those in clauses 6 and 7, were expressed in future-facing language and existed only from the effective date. Clause 17, which made the agreement the entire agreement concerning marketing and sale from that date, confirmed that reading. Commercial continuity and the parties’ former common ownership could not displace the contractual language. The indemnity therefore did not cover policies sold before 1 December 2000.

4. The cross-appeal failed at the threshold imposed by section 1(6) of the Civil Liability (Contribution) Act 1978. Regulatory redress under DISP and the Financial Ombudsman Service scheme arose from obligations owed to the regulator. A complaint, an internal redress decision, or enforcement of an accepted ombudsman award did not constitute an action by a customer capable of establishing a liability to that customer for contribution purposes.

5. Sections 1(2) and 1(6) required an actionable liability on the existing facts immediately before payment. The proposed counterfactual, which assumed non-payment, a future final determination, acceptance and a later action, could not satisfy that requirement. In any event, a possible claim for breach of a regulatory obligation was not the same damage as loss caused by the alleged mis-selling. The remaining cross-appeal grounds did not arise.

• Court of Appeal (Civil Division): Allowed Santander’s appeal, set aside the indemnity judgment, and dismissed AXA’s cross-appeal: [2026] EWCA Civ 1185 .
• High Court (Commercial Court): Dias J held that clause 12.2 of the Agency Agreement applied to historic sales and awarded the respondents approximately £677 million; she dismissed the contribution claim: [2025] EWHC 1881 (Comm) .