The recent decisions in CGL Group Limited v RBS and Holmcroft Properties could suggest that claims against banks are now struggling. However, these decisions are just the initial skirmishes; other battles remain to be decided and there is an undeniable appetite and scope to continue with such claims.
The rise of claims against banks
Since the banking crisis of 2007-2008 we have seen a never ending tide of banking scandals emerge with wave after wave of complaints and claims against banks.
Gone are the days when we unquestioningly trusted our friendly bank manager. We have now seen the mis-selling of payment protection insurance, of interest rate hedging products (predominately swaps) and of packaged accounts alongside the manipulation of LIBOR and of foreign exchange rates. As a result, public opinion of banks has plummeted and legal claims by unhappy customers have soared.
However, such claims are not easy. They often concern complex and varied issues and are subject to the ever evolving decisions of the courts on these matters. So if you are thinking of starting any action, it is important to keep up to date with the current trends and get proper advice in respect of your options.
Swaps mis-selling claims in 2015
The complex and varied causes of action against the banks as regards their systemic failings and the evolving law can be seen in recent swaps mis-selling cases.
In 2015 we saw a number of positive decisions for those bringing these claims against banks which will have galvanised those pursuing or thinking of pursuing such litigation. In particular:
CGL Group Limited v RBS and Holmcroft Properties
However, the first decisions of 2016 appear to be a win for the banks.
In January 2016 the judge in CGL Group Limited specifically questioned the decision in Suremime, finding that no duty of care could arguably be said to have arisen by the bank’s agreement with the FCA to review the sale of the products to the claimant. The judge stated that whilst it was not necessary to decide if Suremime is to be followed, if it were necessary so to conclude, he would conclude that the decision was wrong and one which he should not follow.
Then, in February 2016, the High Court found that where an independent reviewer had been appointed under a scheme to provide redress to customers who had been mis-sold financial products by a bank, the reviewer’s approval of the bank’s offer of compensation to a customer was not amenable to judicial review. The judgment makes it clear that whilst there were powerful pointers in favour of the amenability to judicial review, ultimately it concluded, although not without some hesitation, that the public element was not sufficiently strong.
Where does this leave us?
These 2016 judgments will be disappointing to those considering claims in the swaps mis-selling saga against the banks for the manner in which they conducted the FCA review or against the independent reviewers for their role in such reviews.
That said, these decisions are just the initial skirmishes and, as the other positive case from 2015 shows, there remain other battles to be fought and decided.
Furthermore, from the tide of banking scandals that we have seen take hold since 2008 it seems likely that claims against banks, in one form or another, are here to stay. Indeed, the new Consumer Rights Act 2015 introduces the interesting prospect of U.S. class action style claims which could see bank customers banding together to bring claims for anti-competitive behaviour by the banks.
Fladgate LLP has a strong banking and financial litigation team that has a wealth of experience in this area and can assist in such disputes.
For further information, please contact:
Steven Mash, Partner, Fladgate LLP (email@example.com)
Leigh Callaway, Senior Associate, Fladgate LLP (firstname.lastname@example.org)
 CGL Group Limited v Royal Bank of Scotland  EWCH 281 (QB).
 R (on the application of Holmcroft Properties Limited) v KPMG LLP  EWHC 1888 (Admin).
 MTR Bailey Trading Limited v Barclays Bank Plc  EWCA Civ 667.
 Suremime Limited v Barclays Bank Plc  EWHC 2277 (QB).