Hausfeld & Co LLP | View firm profile
In what has become one of the most anticipated features each year, The Lawyer Top 20 Litigation for 2024 includes the All-Party Parliamentary Group on Fair Business Banking v The Financial Conduct Authority,the judicial review relating to the interest rate hedging products disgrace – one of the worst scandals in British banking – as one to watch.
The Lawyer writes:
“In what promises to be a significant judicial review for the financial services sector, The All-Party Parliamentary Group on Fair Business Banking (APPG) seeks to overturn a decision by the Financial Conduct Authority (FCA). If successful, banks could be required to pay a further £3.2bn to customers who were mis-sold interest rate swaps in the interest rate hedging products scandal.
The scandal saw banks mis-sell products designed to protect customers from interest rate rises, but which actually left them with enormous costs when the global financial crisis hit and interest rates fell. A 2012/13 redress scheme entered into between the FCA and nine retail banks including Barclays, Lloyds and Santander resulted in the banks paying more than £2bn to customers in respect of over 20,000 sales.
However, a 2021 review by former Monckton Chambers barrister John Swift KC criticised the scheme, including its scope, finding that it was wrong to exclude thousands of sales to customers who were considered “sophisticated.” Although the FCA accepted several of Swift’s findings, it did not agree to expand the scope to compel the banks to provide further redress.
The cross-party group of MPs and Peers, chaired by Tories Simon Fell and William Wragg, is crowdfunding its application to reverse this decision, arguing it was irrational for the FCA to reject Swift’s findings on scope, and that it acted irrationally and procedurally unfairly in taking no further steps.”
Ned Beale, Simon Bishop, Rachael Baillie and Alex Cooper are representing the APPG and are working with 3 Hare Court’s Thomas Roe KC and 39 Essex’s Anna Lintner.
The full article (subscription may be required).