The Court of Appeal has dealt a blow to businesses bringing claims against banks for allegedly mis-selling interest rate swaps products by dismissing a claim against the Royal Bank of Scotland.
At issue was the assertion that the bank had provided ‘advice’ instead of ‘information only’ when swaps products were sold to the claimants, estate agent John Green and hotelier Paul Rowley. The High Court rejected their claims in December last year.
The full Court of Appeal judgment will be published later this year, and will be closely studied by claimant solicitors. Over 40,000 swaps products were sold to small and medium-sized enterprises, and the Financial Services Authority (now the Financial Conduct Authority) estimated that 90% were mis-sold.
John Green of national firm Clarke Wilmott, who was instructed for the appeal, said he was ‘very disappointed’ by the outcome, but added that the case had ‘limited wider application’. Crucially, Green said, the court had not considered whether the bank had broken conduct of business rules.
Fraser Whitehead, head of group litigation at Slater & Gordon, told the Gazette that the case was ‘extremely fact-sensitive’ and of ‘no significance’ to 250 claims in which the firm is acting.
Leading banks have contested swaps mis-selling claims on a case-by-case basis. But the provision made in their accounts to settle claims has increased massively since June 2012 when the FSA completed its initial review on the sale of such products to SMEs.