seven corporate sins as a source of government revenue and economic stimulus1 


April 2013

Insurance Bulletin
Candice Chan-Glasgow, student at law

Through our lives thy meshes run
Deft as spiders' catenation
Crossed and crossed again and spun
Finer than the fiend's temptation.

Deadly Sins by C. S. Lewis

The prolonged economic downturn and the fear of prolonged deflation have put new financial strains on governments. Governments everywhere are looking for new sources of revenues without raising taxes. Quantitative easing by central banks has been tried with mixed reviews. Governments are, therefore, looking for new forms of economic stimulus. Corporate malfeasance, excessive risk taking and copycat sharp practices by large multi-nationals and financial institutions provide possible new opportunities and sources.

This paper examines recent and developing fines and settlements resulting from the seven corporate sins of corruption and bribery, money-laundering, sanctions-breaking, conspiracy, tax evasion, sharp practice, and mistreatment of customers. The extraordinary amounts involved should be recognized as a significant source of revenue to governments and in at least one developing case as a possible source of economic stimulus. They can also be expected to increase the threat of claims against directors and officers of the offending companies and their insurers.

sin #1: corruption and bribery

Recent penalties levied against corporations for bribery and corruption has made headlines across the world. The Foreign Corrupt Practices Act (FCPA)2 was enacted in the United States in 1977 to prohibit payments or inducements to foreign government officials to secure any advantage or assist in obtaining business with any person. The ten largest FCPA financial settlements during the period of 2002 to 2012 for corporate defendants totaled some $3.2 billion in fines and penalties paid to the United States Department of Justice (DOJ) and the United States Securities and Exchange Commission (SEC). Of the top ten, one settlement occurred in 2008, one in 2009, six in 2010 and the remaining two in 2011.

The three largest FCPA financial settlements alone have resulted in about $1.78 billion in fines and penalties.3 Those three corporate defendants are: Siemens AG ($800 million), KBR, Inc. and Halliburton Co. ($579 million) and BAE Systems PLC ($400 million). From these figures, it appears that the corporate sin of corruption and bribery could potentially become a new, albeit unconventional, source of government revenue.

Siemens AG

Siemens AG is Europe's largest engineering conglomerate. The DOJ and SEC charged the German based company under the FCPA with securing business contracts by bribing foreign officials. In December 2008, Siemens AG and three of its subsidiaries – Siemens S.A. - Argentina (Siemens Argentina), Siemens Bangladesh Limited (Siemens Bangladesh) and Siemens S.A. - Venezuela (Siemens Venezuela) – pleaded guilty to violations of the FCPA and agreed to pay a combined $450 million fine to the DOJ. Siemens AG further agreed to pay a $350 million disgorgement of profits to the SEC. The $800 million in combined penalties is the largest FCPA monetary sanction levied on a single company to date. The company also agreed to pay €395 million to settle charges by the Munich Public Prosecutor's Office, on top of the €201 million it had already paid in connection with similar charges.

According to the court documents, Siemens AG began falsifying its corporate books in the early 1990s.4 The company's bribery spanned the globe; corrupt payments were made in the Americas, the Middle East, Europe, Asia and Africa. Siemens AG was listed on the New York Stock Exchange in March 2001 and from then until 2007, made $1.36 billion in payments, of which $805 million were corrupt payments to foreign officials.

From September 1998 until 2007, Siemens Argentina paid Argentine officials to secure an advantage in their bid for a $1 billion national identity card contract. After the record breaking monetary settlement in 2008, on December 31, 2011, the SEC and the DOJ charged seven former executives for their involvement in the national identity card scheme. It is alleged that the former executives had roles in authorizing, negotiating, facilitating or concealing bribes. As of this writing, the individual charges have yet to be settled.

Other Siemens AG subsidiaries were also involved in the rampant bribery. From late 2001 until about May 2007, Siemens Venezuela paid about $18.8 million to Venezuelan officials to assist them in obtaining business contracts. Similarly, from May 2001 to August 2006, Siemens Bangladesh made payments of about $5.3 million to Bangladeshi officials to secure an advantage during a project bidding. From 2000 to 2002, Siemens S.A.S. of France (Siemens France), Siemens Sanayi ve Ticaret A.S. of Turkey (Siemens Turkey), Osram Middle East FZE (Osram Middle East) and Gas Turbine Technologies S.p.A. (GTT) paid around $1.7 million in kickbacks to the Iraqi government in order to earn $80 million in contracts. These 42 contracts resulted in collective profits of about $38 million for Siemens France, Siemens Turkey, Osram Middle East and GTT.

Bribery appeared to be part of the corporate culture at Siemens AG and its subsidiaries for over a decade and the large penalties levied on the company reflected this.

KBR, Inc. and Halliburton Co.

Kellogg Brown & Root LLC (KBR), a subsidiary of KBR, Inc., is a global engineering company based in Houston, Texas. Halliburton Co. owned KRB during the relevant periods of bribery, until it spun the company off in April 2007. On February 11, 2009, KBR pleaded guilty to bribing Nigerian government officials to obtain $6 billion of construction contracts, contrary to the FCPA. The 10-year scheme spanned the globe, involving companies in Europe, the United States, Japan and Nigeria. KRB agreed to a $402 million criminal fine to the DOJ and parent companies KRB Inc. and Halliburton reached a settlement with the SEC to pay $177 million in disgorgement of profits.

The SEC alleged that the bribery began in 1994 when former CEO of KBR Inc., Albert "Jack" Stanley, and other members of the four-company joint venture met with Nigerian government officials to arrange the corrupt payments. These payments were disguised in the company's records as contracts between agents in the United Kingdom and Japan. Over $180 million was funneled to Nigerian officials in this manner, including $5 million in cash to a Nigerian political party.

In related prosecutions, the other members of the joint venture, Technip S.A., Snamprogetti Netherlands B.V., and JGC Corporation, were fined $240 million, $240 million and $218.8 million, respectively. Factoring in the prosecutions against these entities and individuals associated with them, the total of the penalties, disgorgements and forfeitures resulting from this foreign bribery case are over $1.7 billion, making this the largest multi-company prosecution under the FCPA to date.

BAE Systems PLC

BAE Systems PLC (BAE) is a multinational defense and security company based in the United Kingdom. On March 1, 2010, BAE pleaded guilty to conspiring to defraud the United States. The company was ordered to pay a $400 million criminal fine to the DOJ. Additionally, the company paid £30 million to the United Kingdom Serious Fraud Office for violating its duty to keep accounting records in Tanzania. On May 17, 2011, BAE announced that it had reached a civil settlement with the U.S. Department of State for $79 million for violations of the Arms Export Control Act5 and the International Traffic in Arms Regulations.6

According to the allegations, from approximately 2000 to 2002, BAE knowingly and willfully making false statements to various U.S. government agencies that it would implement procedures to ensure compliance with the anti-bribery provisions of the FCPA. BAE benefited by more than $200 million from these actions. For example, BAE made payments of more than £10 million to a bank account controlled by an intermediary knowing that the payments would likely be used to influence officials in the Kingdom of Saudi Arabia responsible for fighter jet contracts. BAE also made £19 million in payments to an intermediary knowing that it was likely to be used to influence decision makers for fighter jet contracts in the Czech Republic and Hungary.

These are just a few examples of the three largest corporate bribery settlements to date. Criminal and civil fines imposed on corporations for violating the FCPA between 2002 and 2012 totaled $4.24 billion.7

sins #2 and 3: money-laundering & sanctions-breaking

Two other corporate sins recently in the news are money-laundering and sanctions-breaking.


On August 29, 2012, Swiss prosecutors began a probe into UBS over alleged money-laundering in Malaysia. The allegations first surfaced from a complaint by the Bruno Manser Fund, a rainforest advocacy group. The complaint alleges that UBS laundered $90 million on behalf of Musa bin Aman, Chief Minister of the Malaysian state Sabah. Musa bin Aman is accused of accepting $90 million of corrupt payments in exchange for logging concessions in the rainforests of Sabah. The money was allegedly held in various UBS bank accounts in Hong Kong and Zurich. As of this writing, a resolution has not yet been reached in this case.


On December 11, 2012, the DOJ announced that it had reached a settlement agreement with HSBC Holdings and HSBC Bank USA (collectively, HSBC). As part of the settlement, HSBC admitted to having an ineffective anti-money laundering program that allowed $881 million of drug money in Mexico and Columbia to be laundered though the U.S. financial system. It also admitted to facilitating approximately $660 million in transactions with the sanctioned countries of Iran, Cuba, Sudan, Libya and Burma. The settlement includes a $1.92 billion fine, comprised of a $1.256 billion forfeiture and $665 million in civil penalties to various U.S. regulators.

ING Bank N.V.

ING Bank N.V. reached an agreement on June 12, 2012, to forfeit $619 million to the DOJ and the New York County District Attorney's Office. From the early 1990s until 2007, the bank illegally facilitated more than $2 billion in transactions though the U.S. financial system on behalf of Cuban and Iranian entities. Transactions with these sanctioned countries were contrary to the International Emergency Economic Powers Act8 (IEEPA) and the Trading with the Enemy Act.9 In addition to the $619 million forfeiture, the bank also agreed to pay a $619 million civil settlement to the Office of Foreign Assets Control (OFAC).

Standard Chartered Bank

Standard Chartered Bank reached a settlement agreement with OFAC, the Federal Reserve Bank of New York, the DOJ and the New York County District Attorney's Office for facilitating $200 million in transactions with Iran, Sudan, Libya, and Burma between 2001 and 2007. These actions were contrary to the IEEPA. The settlement agreement was reached on December 10, 2012, and includes a forfeiture of $327 million. Further, the bank reached an agreement with the New York State Department of Financial Services in August 2012 for a civil penalty of $340 million, bringing the company's total penalties to $667 million.


On August 18, 2010, Barclays and the DOJ reached a settlement over allegations that the bank facilitated $500 million in transactions with banks in the sanctioned countries of Cuba, Iran, Libya, Sudan, and Burma. Barclays admitted to violating the sanctions and concealing these actions over a ten-year period. As part of the settlement, Barclays agreed to forfeit $149 million to the United States and $149 million to the New York County District Attorney's Office. Barclays also entered into a settlement agreement with OFCA under which Barclays will pay the OFCA $176 million.

Credit Suisse

Credit Suisse was accused of facilitating monetary transactions from the sanctioned countries of Iran and Sudan. It was alleged that, as part of the scheme, the bank actively took measures to hide customer names, bank names and addresses from the payment information to avoid detection. The matter was resolved with an agreement reached with the DOJ on December 16, 2009. The settlement includes a forfeiture of $536 million to the DOJ and to the New York County District Attorney's Office.

The above examples are just a few of the recent financial settlements in the area, totaling about $4.84 billion in penalties and forfeitures.

sin #4: conspiracy

Another corporate sin – one that may often directly implicate directors and officers in illegal activity – is conspiracy.

the LIBOR scandal

The London Interbank Offered Rate (LIBOR) scandal was thrust into the spotlight in the summer of 2012. The scandal involved banks manipulating their LIBOR rates from 2005 through 2009 to profit from trades or to appear more creditworthy. LIBOR underpins $360 trillion of loans and financial contracts and rigging the rates have affected millions of consumers and the amount of interest they paid during this time.

On June 27, 2012, Barclays announced that it would pay $453 million in fines to regulators in the U.S. and U.K. for its involvement in the scandal. On December 19, 2012, UBS became the second bank to admit to wrongdoing in the scandal and announced that it would pay a $1.5 billion fine to regulators in the U.S., U.K., and Switzerland. The Royal Bank of Scotland is currently in settlement negotiations with the regulators, but it is expected that it will be fined about £500 million by the regulators.10 Over 20 other banks are also under investigation and it is expected that these banks will also be fined for their involvement in the conspiracy.

sin #5: tax evasion

Like conspiracy, the corporate sin of tax evasion will usually involve either explicit or implicit involvement of directors or officers or senior management.

swiss banks

In 2009, the DOJ charged UBS with conspiring to defraud the United States by assisting 52,000 Americans evade taxes. It was alleged that UBS bankers frequently traveled to the United States in order to market their services and actively seek customers attempting to evade U.S. taxes. On February 18, 2009, UBS pleaded guilty to the criminal charges and paid $780 million to the United States Internal Revenue Service (IRS) for its role in the scheme. As part of the agreement, UBS agreed to reveal the identity of about 5,000 customers that the IRS believes are evading taxes. Also of note in this case is that Bradley Birkenfield, a former UBS employee, received a $104 million whistleblower award for his role in uncovering the tax fraud. The award was paid out in early September 2012.11 This landmark settlement marked the beginning of the IRS' crackdown on offshore tax evasion.

In February 2012, the United States charged Swiss bank Wegelin with enabling American citizens to evade taxes in offshore bank accounts. The charges alleged that Wegelin actively recruited American clients, promising banking secrecy, and that Wegelin discouraged clients from going forward to the IRS in exchange for reduced penalties. In early January 2013, it was reported that Wegelin would close down after pleading guilty to assisting Americans evade taxes on $1.2 billion over a period of almost ten years. Wegelin, Switzerland's oldest private bank, was also fined $57.8 million for its wrongdoing.12

Another 11 Swiss banks are also currently under investigation by the IRS, including Credit Suisse and Julius Baer. As of this writing, settlements in these investigations are currently pending, but part of the settlements will no doubt include more fines to the American regulators.

2008 Liechtenstein tax affair

On March 11, 2008, Lichtenstein police authorities posted a notice that it had issued an international arrest warrant for Heinrich Kieber, who was suspected of selling a compact disc (CD) with stolen banking information. Mr. Kieber worked for Liechtenstein bank LGT and copied banking information of about 5,800 clients around the world who were using these accounts to evade taxes. German authorities confirmed that they had paid an informant over €4 million for the CD and are thought to have created Mr. Kieber a new identity and given him protection. The banking information has also been sold to authorities in the United States, Australia and other countries around the world.

Consequently, Liechtenstein began to discuss tax avoidance issues with various countries. Of particular note is the Liechtenstein Disclosure Facility (LDF) reached in 2009 in the United Kingdom. Under this plan, Britons who have unpaid U.K. tax liabilities from assets or investments in Liechtenstein bank accounts can "legitimize" their previous actions by coming forward and paying reduced penalties. The LDF runs from September 1, 2009, until April 5, 2016. As of June 2012, over 2,400 people have registered under the LDF and have paid back £363 million in taxes. The HM Revenue and Customs estimates that up to £3 billion will be paid back under the LDF.13

The first five corporate sins of corruption and bribery, money-laundering, sanctions-breaking, conspiracy, and tax evasion have resulted in large payments to various government authorities and regulators. The next two corporate sins of self interest and mistreatment of customers have led to payments to various government bodies, as well as payments to consumers.

sin #6: self interest

The example of the corporate sin of self interest provide here relates to the handling of unclaimed property.

U.S. death register

States, federal agencies and other organizations in the United States are holding over $58 billion in unclaimed property. Of that total, about $41.7 billion is being held by various states.14 According to the Pension Benefit Guaranty Corp., over $300 million in pension benefits is owed to beneficiaries and the average unclaimed pension benefit is $9,100.15 If disbursed to the rightful beneficiaries, this large amount of unclaimed property could act as an economic stimulus by putting additional money into the hands of consumers. Where the money is not claimed by the entitled beneficiaries, it acts a source of revenue for the state.

The precise rules vary by state, but generally, financial institutions are required to provide the state with unclaimed property if they are unable to locate the owner. In Delaware, for example, unclaimed securities and dividends are paid to the state after three years and all other types of property after five years. Unpaid property is Delaware's third largest source of revenue and between 2009 and 2012; the state has raised $1.24 billion from unpaid property.16 The unclaimed property will always belong to the beneficiary; however, until and unless it is claimed, states can use the money to fund their operations.

A state may periodically conduct an audit on companies to verify compliance with the unclaimed property rules. In 2010, CA Technologies Inc. made a $17.6 million settlement payment to Delaware to resolve matters arising from an audit. Similarly, in 2012, as a result of an audit, Staples paid Delaware almost $9 million. On April 22, 2011, California announced a "landmark" settlement with insurer John Hancock. The settlement requires John Hancock to seek out the beneficiaries of more than $20 million in death benefits and to pay the state three percent compounded interest on the value of the held amounts from 1995, or from the policy holder's death, whichever is later. This was the first settlement arising from the 21 audits the state began in 2008. On October 22, 2012, Florida successfully reached a $25 million settlement with AIG for unclaimed life insurance accounts. In April 2012, MetLife reached a settlement to seek out owners of life insurance policies worth $438 million, and to gradually remit this money to the state if it is unable to locate the beneficiaries.

Recent settlements require insurers to determine if policyholders have died by regularly checking the Social Security's death database. They are also obligated to make efforts to locate beneficiaries and if the beneficiaries cannot be located, remit the unclaimed property to the state. This contrasts with the historical practice of paying out benefits only when a beneficiary makes a claim.

sin #7: sharp practices and mistreatment of customers

The seventh and final corporate sin discussed here relates to the recent news stories involving sharp practices and mistreatment of customers by various financial and insurance institutions.

U.S. mortgage scandal

The U.S. subprime mortgage disaster that culminated in the 2008 financial crisis has resulted in numerous lawsuits and investigations into the financial institutions involved. Some of the notable cases and financial settlements are outlined below.

In February 2012, a $25 billion settlement was reached between 49 state attorneys, the federal government and Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo. The $25 billion will be used for relief to distressed borrowers and direct payments to participating states and the federal government. The five mortgage servicers were accused of robo-signing and wrongdoing in mortgage servicing between January 1, 2008, and December 31, 2011. The mortgage servicers signed foreclosure documents without the presence of a notary public and without determining whether the documents were factually correct.

On October 24, 2012, the United States sued Bank of America for $1 billion, alleging that it sold toxic mortgage loans to the government mortgage agencies Fannie Mae and Freddy Mac. The lawsuit alleged that the scheme began at Countrywide Financial Corp. (Countrywide) in 2007 and was called "Hustle" because it was meant to speed up the processing of home loans. Bank of America purchased Countrywide in July 2008, and the scheme continued through 2009. On January 7, 2013, Fannie Mae announced that it had reached a settlement with Bank of America. As part of the settlement, Bank of America will pay Fannie Mae $3.55 billion, repurchase loans plus accrued interest for approximately $6.75 billion and make an additional $1.3 billion payment for compensatory fee obligations.

On January 7, 2013, the U.S. Federal Reserve announced that the Office of the Comptroller of the Currency and the Federal Reserve Board had reached an agreement with ten mortgage servicing companies for $3.3 billion in cash payments and $5.2 billion in other assistance to borrowers. The participating mortgage servicers to this agreement include: Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo. On January 16, 2013, it was announced that similar agreements were reached with Goldman Sachs and Morgan Stanley for $232 million in direct payments and $325 million in other assistance. On January 18, 2013, it was announced that an agreement was reached with HSBC for $96 million in direct payments and $153 million in other assistance. These agreements settled the enforcement actions against the mortgage servicers for deficient practices in mortgage loan servicing and foreclosure processing during 2009 and 2010. The mortgage servicers were accused of signing off on mortgage documents without actually reading them in order to foreclose on homes more quickly.

The relief to borrowers and direct payments to government bodies from the above mortgage abuse settlements total $45.9 billion. This may not close the chapter on the mortgage scandal, however, as there may still be more settlements to come.

U.K. payment protection insurance

Payment protection insurance (PPI) policies insure against the risk that a borrower is unable to make loan repayments if he/she becomes ill or unemployed. The U.K. Financial Services Authority (FSA) found that PPI policies were widely mis-sold in the U.K. by, for example, misleading consumers into thinking PPI was mandatory, not explaining significant exclusions to the policy (many consumers purchased policies unsuited for them that would never pay out because of the exclusions) or adding policies to loans without the consumer's knowledge. The FSA responded by introducing Policy Statement 10/12 on August 10, 2010, to govern the handling of consumer complaints over the sale of PPI policies. The Policy Statement explains, among other things, when firms must review complaints from customers who have purchased PPI policies and flaws in sales practices. On April 20, 2011, the English High Court of Justice dismissed the British Bankers' Association's application for judicial review of the Policy Statement. Effectively, the decision confirms that consumers that were previously mis-sold PPI policies are to be financially compensated.

An estimated 34 million PPI policies have been sold since 2001. Barclays has about 3,400 employees to look after PPI claims, while Lloyds Banking Group has about 6,000, HSBC 600, and Royal Bank of Scotland 1,800.17 Where a customer's claim for compensation cannot be dealt with in the eight-week regulatory deadline or where the consumer disagrees with the bank's decision, the case can be escalated to the Financial Ombudsman Service (FOS). The FOS resolved about 90,000 of the claims it received in 2012 and expects to resolve 245,000 cases in 2013. The FOS has also increased the fees and levies it charges the banks for dealing with PPI complaints.18 This additional funding has allowed the FOS to hire an additional 1,000 caseworkers, many of whom will be working exclusively on PPI complaints. The FOS receives up to 400 complaints an hour, agrees with the consumer about 70% of the time and awards an average of £2,750 in compensation.19

To cover claims for the mis-selling of PPI policies, £8.05 billion has already been paid out to consumers and £13 billion is currently set aside by banks and building societies. According to some estimates, total compensation for all claims could be as much as £40 billion.20 These refunds can stimulate an economy by giving consumers additional income to spend, thereby increasing market demand. Assuming consumers choose to spend the money (as opposed to saving it), this banking scandal could provide a much-needed boost to the U.K. economy. In fact, in normal economic circumstances, a £15 billion injection into the U.K. economy could increase GDP by 0.1 to 0.2%.21 During a recession, the increase to GDP could be as much as 0.7%.22 Some commentators based on previous experience have predicted that these payments could provide Britain with an economic stimulus.

concluding thoughts

Corporations have become larger and more international, operating in markets with different standards and levels of corruption. However, human nature which for some individual includes greed, can infect the corporate culture. Copying the practices and seeming successes of others can spread bad behavior. Regulatory bodies, police authorities, anti-money laundering and anti-terrorist efforts have also become more international, coordinated and sophisticated resulting in more active and aggressive prosecution of corporate wrongdoing..

The fines, penalties, forfeitures and refunds from the seven corporate sins covered in this article total almost $183.5 billion.23 To put this figure into perspective, it is about 1.2% of the U.S. 2011 GDP and 7.6% of the U.K. 2011 GDP. In other words, these corporate sins are generating a sizeable amount of government revenue. Further, the unclaimed property, mis-selling of PPI policies and mortgage abuse cases could potentially act as economic stimuli by increasing consumers' purchasing power.

The prosecutorial successes identified above can be expected to lead to further investigations, prosecutions and large additional fines for national treasuries and in some cases large restitution payments to the public.

With high profile settlements of the kinds described above, lawsuits against directors and officers of the corporations involved are a near certainty. The response of the D&O insurers can form the basis of another paper.

by Frank Palmay and Candice Chan-Glasgow, student at law

1 This paper was inspired by Philip H. Cook, CEO of Omega General Insurance Company and Focus Group, and his talk on Industry Trends sponsored by the Insurance Institute of Canada in Toronto on January 17, 2013.

2 15 USC §§ 78dd-1 (1977).

3 These figures do not include the €596 million Siemens AG also paid to the German authorities and the £30 million BAE Systems also paid to the UK authorities.

4 Until 1999, in Germany, bribes paid abroad were not criminal and were tax deductible. Siemens AG utilized these tax write-offs in the early 1990s.

5 22 USC §2751 (2012).

6 Ibid. §2778.

7 Philip Urofsky & Danforth Newcomb, "FCPA Digest Recent Trends and Patterns in the Enforcement of the Foreign Corrupt Practices Act" Shearman & Sterling LLP (January 2013).

8 50 USC §1701 (1977).

9 50 USC §§ 1-44 (2012).

10 Jill Treanor, "Libor Rigging: US Regulators may want RBS to Plead Guilty to Criminal Charges" The Guardian (29 January 2013).

11 Interestingly, Mr. Birkenfield receive this award while still serving time in a federal correctional institution after pleading guilty to conspiracy to defraud the U.S.

12 "Swiss Bank Wegelin to Close after US Tax Evasion Fine" BBC (4 January 2013).

13 "£3bn Due in Liechtenstein Tax Plan" The Telegraph (12 June 2012).

14 Melanie Hicken, "$58 Billion Unclaimed: Is Some of it Yours?" CNN Money (27 January 2013).

15 Ibid.

16 Vipal Monga, "Unclaimed? Delaware Gets It" The Wall Street Journal (29 January 2013).

17 Jill Treanor, "Claims for Mis-sold Payment Insurance are Costing Banks Time as well as Cash" The Guardian (16 November 2012).

18 Lisa Bachelor, "PPI Payouts Expected to Rocket in 2013" The Guardian (10 January 2013).

19 Supra note 16.

20 Lisa Bachelor, "Banks Seek PPI Claims Deadline" The Guardian (18 January 2013).

21 Norma Cohen, Sharlene Goff & Lucy Warwick-Ching, "Bank Scandal has Silver Lining for UK" Financial Times (6 August 2012) .

22 Larry Elliott, "PPI Compensation Payments could Affect UK Economy" The Guardian (7 August 2012).

23 This figure includes the £40 billion estimate of PPI policy refunds and the £3 billion estimate to be paid back under the LDF.

a cautionary note

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2013