The APPG, a group comprising MPs and Peers, has stated its intent to bring a judicial review against the Financial Conduct Authority (FCA). This decision follows an FCA-commissioned review (led by John Swift QC) of a scheme established by the FSA (the FCA’s predecessor). The scheme was an agreement with nine banks, which resulted in over £2.2 billion in compensation being distributed to customers who had been mis-sold interest rate hedging products (IRHPs) between 2001 and 2011. Potential beneficiaries of this scheme were assessed on the basis of a ‘sophistication test’, something which excluded approximately one-third of the potential beneficiary pool.
The Review’s Findings
The Swift Review concluded, at a cost of over £7 million, that the FSA had acted unlawfully by excluding nearly one-third of the beneficiary pool. The FCA issued a response, stating that “it does not consider that the FSA was wrong to limit the scope of the redress scheme to less sophisticated customers and has concluded that it would not be appropriate or proportionate to take further action. Accordingly, the FCA will not seek to use its powers to require any further redress to be paid to IRHP customers”.
The APPG has viewed this response as entirely at odds with the Review’s conclusion, noting that the statement is both flawed and unlawful. In minutes published from an FCA board meeting in March 2022, the regulator has confirmed that it intends to defend the application for permission for judicial review, and indeed defend the review itself if permission is to be granted. In February 2022, Hausfeld (APPGs legal representatives), sent a letter before claim to the FCA as per the Pre-Action Protocol for Judicial Review.
The APPG’s decision is significant as it represents a political challenge to a UK regulator. Those still seeking redress from banks for mis-sold IRHPs will no doubt follow the outcome of this review very closely.
City of London Specialist Mis-selling of Swaps Lawyers
If your business is a party to an interest rate swap which you feel was mis-sold we, as specialist interest rate swaps lawyers, are able to assist. Our highly qualified financial services mis-selling litigation team provides the very best swaps mis-selling representation and uses it banking and financial services litigation expertise to ensure we obtain the best possible results and refunds for our clients. We’ve advised hundreds of businesses seeking redress via both litigation and via the FCA/FSA Review process for the mis-selling of IRHPs (lexlaw.co.uk/fsareview) as well as those with ‘Hidden Swaps’ or fixed rate loans with embedded derivatives. Just call us on ☎ 02071830529 or complete our online contact form; our legal team are waiting to help.
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