Firm wins £4.2m after ‘sure‑fire’ cases never see court

High Court finds outsourcing firm failed to progress thousands of ‘sure‑fire’ PPI cases

A High Court judge has ordered an outsourcing company to pay almost £4.2m in damages after it failed to properly handle thousands of “sure‑fire” PPI claims.

The ruling came to light this week when judgment was published in the case of Momenta Holdings (PPI) Ltd v Cheval Legal Ltd & Ors. His Honour Judge Johns KC found that Momenta Holdings, an outsourcing firm, had failed to progress tens of thousands of Payment Protection Insurance claims for Cheval Legal, resulting in lost and abandoned cases worth millions.

The two firms entered into outsourcing agreements in 2020 and 2022, which allowed Momenta to run the PPI claims under damages‑based agreements. But the relationship soured when Cheval discovered widespread failings: 742 claims were lost due to procedural errors, another 432 were abandoned altogether, and 29,336 were never issued despite Momenta receiving £1.4m in litigation funding.

Cheval argued the claims were virtually guaranteed winners and that it had suffered significant losses when the work was mishandled. The judge agreed, assessing the chance of recovery at 72.5%. He ruled that roughly a quarter of the claims were ineligible or “rogue” and adjusted the award accordingly.

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The court heard how 742 claims had been struck out due to procedural failures, making Cheval eligible for about £553,000 in damages. A further 432 claims were abandoned, yielding £145,000 in compensation. The biggest figure came from the 29,336 claims that were never issued despite Cheval providing £1.4m to cover their costs. The judge stated: “Cheval has, on the evidence, paid this money for a service which has not been provided. In my judgment, it is entitled to claim the full total sum paid as damages representing wasted expenditure, or alternatively as a remedy in unjust enrichment.”

Momenta, which went into voluntary liquidation last year due to loss of revenue and legal costs, had issued proceedings in 2023 for missed payments but failed. Its claim was thrown out, and the liquidators confirmed that it will not be pursued.

Although the judgment was made in December, its publication this week shines a light on the fragility of outsourcing relationships within the claims industry. The ruling will likely prompt closer scrutiny of such arrangements and their enforcement across the sector.