Tag: Financial Services

The Court of Appeal judgment in Green & Rowley v Royal Bank of Scotland EWCA Civ 1197 concerns the sale of an interest rate swap (IRS) by RBS to the appellants, experienced businessmen. The court upheld the trial judge’s finding that RBS complied with Financial Services Authority Conduct of Business (COB) rules, including providing clear risk warnings. Key issues included whether RBS adequately disclosed potential break costs associated with early termination. The court concluded the swap was straightforward, and the appellants were capable of understanding or seeking clarification about the risks. The judgment highlights the necessity for clear, fair communication in complex financial product sales and confirms that sophisticated clients bear responsibility for understanding such transactions. Lexlaw offers expert advice on swaps mis-selling claims and related litigation.

Court of Appeal Judgment: Green & Rowley v The Royal Bank of Scotland

The Court of Appeal in Green & Rowley v RBS confirmed that a bank does not owe a common law duty to ensure that customers fully understand the risks of interest rate swaps beyond the regulatory requirements. The case involved claims of mis-selling, particularly around inadequate disclosures. The court upheld that the bank’s compliance with the Financial Services Authority’s Conduct of Business Rules was sufficient, and the customers were considered knowledgeable enough to understand the transaction.

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Interest Rate Swaps Mis-selling: FCA Publishes IRHP Review Statistics

The FCA’s update on the IRHP mis-selling review reveals severe delays, with only 10 final redress offers accepted out of over 30,000 cases after 14 months. RBS, with the largest review population, lags behind, still classifying many customers. Only 2% of sales have completed compliance assessment, with 93% found non-compliant.

The Court of Appeal dismissed the Green & Rowley appeal against RBS regarding swaps mis-selling. The appeal failed mainly because the claimants abandoned their section 150 FSMA claim, likely due to mistaken limitation concerns. The court found no common law advisory duty beyond regulatory compliance in this case. The decision highlights the critical importance of correctly calculating limitation periods in swaps mis-selling claims to avoid losing legal rights.

Green & Rowley -v- The Royal Bank of Scotland: Appeal Dismissed

The Court of Appeal dismissed the Green & Rowley appeal against RBS regarding swaps mis-selling. The appeal failed mainly because the claimants abandoned their section 150 FSMA claim, likely due to mistaken limitation concerns. The court found no common law advisory duty beyond regulatory compliance in this case. The decision highlights the critical importance of correctly calculating limitation periods.

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‘FCA Swaps Review’ Update: Comment on Bank IRHP Review Delays with Statistics from the FCA

The FCA Swaps Review has faced significant delays since beginning in April 2013, frustrating many affected businesses. Latest FCA data reveals that only 50% of sophistication assessments are complete, 3.9% of cases have reached interviews, and 2.6% have had payments suspended. Delays risk customers losing legal rights due to the six-year limitation period. Concerns exist over banks bypassing the sophistication stage while fairness issues arise over banks self-assessing their mis-selling.

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‘FCA Review’ of Interest Rate Hedging (IRHP) Sales: Written Statement or ‘Fact Find’ Interview?

The FCA/FSA Hedging Review is conducted by the banks, not the regulator, and involves recorded interviews or fact-find meetings with customers. These interviews can be one-sided, with the bank’s lawyers asking questions designed to limit compensation. Customers often have limited rights to access bank records or challenge questions. A written statement, prepared with legal guidance, can be a safer way to present the sales experience without the risks of interviews.

The Parliamentary Commission on Banking Standards’ Final Report calls for radical reforms to restore banking trust, addressing LIBOR manipulation and derivatives mis-selling. Key proposals include criminal liability for reckless bankers, improved governance, stronger regulator duties, and wider access to the Financial Ombudsman Service for small businesses. The report also urges greater financial literacy, transparency, and regulation to prevent banks from disclaiming advisory responsibility when selling complex products like interest rate swaps. Lexlaw supports clients affected by such mis-selling and advocates for fairer banking practices. Contact Lexlaw for expert legal advice and representation.

The Banking Commission’s Proposals relevant to Swaps Mis-selling

The Parliamentary Commission on Banking Standards’ Final Report calls for radical reforms to restore banking trust, addressing LIBOR manipulation and derivatives mis-selling. Key proposals include criminal liability for reckless bankers, improved governance, stronger regulator duties, and wider access to the Financial Ombudsman Service for small businesses. The report urges greater financial literacy, transparency, and regulation to prevent banks from disclaiming advisory responsibility when selling complex products.

The Financial Ombudsman Service (FOS) saw a 92% rise in new complaints in 2012/2013, with 258 cases related to interest rate hedging products (IRHPs) like swaps. However, the FOS can only handle complaints from microenterprises, excluding many small businesses. The FOS also has a £150,000 compensation cap, often insufficient for these claims. The FSA rejected setting up a special scheme for wider IRHP complaints, leaving the FOS as a last resort after bank reviews. Lexlaw advises clients to seek legal help early to avoid limitation issues and ensure full redress.

Swaps Complaints in the Financial Ombudsman Service Annual Review for 2012/2013

The Financial Ombudsman Service (FOS) saw a 92% rise in new complaints in 2012/2013, with 258 cases related to interest rate hedging products (IRHPs) like swaps. However, the FOS can only handle complaints from microenterprises, excluding many small businesses. The FOS also has a £150,000 compensation cap, often insufficient for these claims. The FSA rejected setting up a special scheme for wider IRHP complaints, leaving the FOS as a last resort after bank reviews.

The Court of Appeal ruled unanimously in RBS v Highland Financial Partners EWCA Civ 328 that RBS procured a previous judgment by fraud, deliberately withholding key documents and misleading their client, lawyers, and the court. The case involved a “sham auction” of loans to create a notional £1.44 billion profit. The judgment raises serious concerns about RBS’s corporate culture and litigation conduct. Contact Lexlaw for expert legal support on complex banking disputes and mis-selling claims.

RBS v Highland Financial Partners: Culture of denial at RBS?

The Court of Appeal ruled unanimously that RBS procured a previous judgment by fraud, deliberately withholding key documents and misleading their client, lawyers, and the court. The case involved a “sham auction” of loans to create a notional £1.44 billion profit. The judgment raises serious concerns about RBS’s corporate culture and litigation conduct.

RBS announced a £700 million provision for Interest Rate Hedging Products (IRHP) mis-selling in their 2012 results, a 1300% increase from the previous £50 million. Despite this, RBS downplays its role in the scandal, highlighting court wins and Financial Ombudsman rulings in its favour, which contrasts with the FSA finding over 90% of such products mis-sold. The provision remains inadequate given the scale of affected non-sophisticated customers. Lexlaw advises anyone affected by RBS swaps mis-selling to seek independent legal counsel promptly. [1](https://lexlaw.co.uk/solicitors-london/rbs-announce-results-provision-for-swaps-mis-selling-increased-by-1300/)

RBS Announce Results: Provision for Swaps Mis-selling Increased by 1300%

RBS announced a £700 million provision for Interest Rate Hedging Products (IRHP) mis-selling in their 2012 results, a 1300% increase from the previous £50 million. Despite this, RBS downplays its role in the scandal, highlighting court wins and Ombudsman rulings in its favour, which contrasts with the FSA finding over 90% of such products mis-sold. The provision remains inadequate given the scale of affected non-sophisticated customers.

Barclays announce 2012 results – Provision for swaps mis-selling £850 million

Barclays Bank announced an £850 million provision for interest rate hedging product (swaps) mis-selling in 2012, with around 4,000 affected customers, approximately 3,000 deemed non-sophisticated. This suggests an average provision of £280,000 per customer. Lexlaw estimates that total liabilities for major banks, including Barclays and RBS, could reach several £billion pounds.