Judicial Review could open floodgates for SWAPs mis selling compensation
The controversial FCA (Financial Conduct Authority) and high street banks £1.8bn compensation scheme to compensate those who were mis sold an interest rate swap is to come under further fire. Britain’s High Court has granted permission for a judicial review of the scheme granting an application on behalf of Holmcroft Properties – a nursing home operator.
In a ruling by Mr Justice Parker following a one day hearing, KPMG – the independent reviewer of the Barclays’ redress programme - can potentially be considered to be a public body and therefore face a judicial review. The FCA required that the banks involved in the scheme nominate reviewers for their compensation schemes in 2012 and Barclays nominated KPMG.
Holmcroft Properties were originally awarded around £500,000 under Barclay’s compensation scheme but was not paid for other consequential losses. This decision could now trigger thousands of other small businesses to seek higher compensation.
Simon Cottrell, Senior Partner at Goldsmith Williams, comments:
“This is yet another exposé in the long and sorry saga of mis sold SWAPs. Whilst any development which helps the victims who were mis sold an interest rate swap is welcome it has come very late in the day for those victims who have accepted compensation and suffered further hardship when that compensation did not address their consequential losses.
“We’ve maintained all along that the compensation scheme was flawed – the basis of the scheme left the fox in charge of the chicken coop. About a third of businesses were excluded from scheme because they were deemed to be sufficiently financially sophisticated to understand the SWAP so there are many victims who have never received any compensation. Now this judicial review highlights the shortcomings in compensation for SWAPs consequential losses.
“Those businesses that believe they have a consequential loss claim should act now. We can take instruction to progress these claims right away; indeed we’re already acting for a number of clients for their consequential loss claim.”
Content correct at time of publication