Unless the broker advised you in his terms of business, how much his commission was going to be, it is unlikely that he would be able to rely on this term because unless you know the amount of commission that you may be required to pay if you cancel the policy, that you cannot make an informed decision whether to go ahead or not and it’s likely to be treated as an Unfair Term in a Consumer Contract and hence be unenforceable under the Act of the same name.
If he was transparent and told you what the amount of commission was, then it is potentially enforceable.
Can I clarify anything else for you?
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Looking at the level of commission, I can see why you’re concerned. I don’t know how they can justify that amount of commission for arranging a life insurance policy.
The fact sheet, you presumably got after you had entered into the contract, in which case its post-contractual and hence unlikely to be enforceable.
If you got it before, it is still potentially unenforceable because whilst the page detailing what the commission is, is clear enough, (even though that is on page 2 and not in your face as you would expect) there is no mention in that document of any clawback and it’s hidden away at the end of a clause entitled “Your protection” which is misleading.
You could potentially argue that in light of the amount of work involved, it’s an unfair bargain. You hadn’t agreed this price in the event of cancellation and in which case, any price agreed for the service must be reasonable and depending on the work involved that they did in selling you this policy, and advising prior to sale, it may be an unreasonable fee.
I cannot guarantee what is going to happen if the broker decides to chase you and it goes to court because the only person who would know that is the judge on the day. My personal view is that he is unlikely to be able to enforce the whole fee if at all.
If you do go to the Small Claims Court, the worst that can happen is that you have to pay the fee plus a small amount of court costs. It may be worth the argument.
No, it just means that it would be litigation in Scotland.
The mechanics of any civil claim are different and the terminology is different but the actual interpretation of the legal system for matters like this is ultimately the same.