Tuesday, 29 November 2011

UK: England and Wales: Court of Appeal upholds decision to wind-up companies offering extended warranties

Earlier this year, in Re Digital Satellite Warranty Cover Ltd. [2011] EWHC 122 (Ch), the High Court held that three companies should be wound-up where they carried on business in contravention of the general prohibition found in Section 19 of the Financial Services and Markets Act (2000). The companies offered extended warranty contracts which the trial judge held were contracts of insurance as defined in Article 3(1) and Schedule 1 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/344).

An appeal against the winding-up orders was made and the Court of Appeal gave its opinion today: see Digital Satellite Warranty Cover Ltd v The Financial Services Authority [2011] EWCA Civ 1413. The court held that the trial judge was entitled to find that the warranties were contracts of insurance within class 16(b) in Schedule 1 of the 2001 Order.

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