It has expressed concern that this may be the first step in a lengthy legal dispute that will further delay the compensation process.
According to the panel the Financial Ombudsman has received over 200,000 PPI cases from consumers, more than half coming in the last financial year.
The ombudsman found in favour of the consumer in 74 per cent of these cases and formally raised concerns over PPI with the regulator in 2008.
Adam Phillips, chair of the panel, said: "We are very pleased with the result of the court case which is a comprehensive endorsement of the FSA’s action over PPI. This judgment is a triumph for common sense."
He added: "It is time for the banks to stop hiding behind expensive lawyers and to finally give consumers the redress they deserve."