Banking Litigation

We appreciate that when disputes arise with banks, organisations of any size can experience significant problems which affect the day to day running of the business. Not only can we handle mis-selling of financial products, we can represent your interests when your business suffers due to issues with your business bank account.

We will firstly work with you to ascertain the issue that your business faces and seek to understand the best ways to resolve your claim. Banking disputes can often involve elements of fraud or negligence and we can use our skills and experience to determine how best to advise and progress your claim.

We aim to get to core of the issues in the most cost effective and hassle-free manner for you. In order to provide a complete advisory service, we will also use our connections with other professional services, such as accountants and financial advisers, to assist your claim and business if appropriate.

How can we help?

We can advise on a range of dispute including:

  • Financial fraud and anti–money laundering, including account closures, asset preservation and regulatory investigations
  • Mis-selling of financial products, including hedge products
  • Lender disputes, involving business to bank
  • Insolvency and loan recovery
  • Unregulated activity and products
  • Secured and unsecured security disputes

Interest rate hedge products (IRHP) are complex financial products that are commonly sold to SME’s. During the period between 2006 and 2008, banks were aggressively selling these products. They were commonly sold to customers alongside, or with, a loan.

What is the purpose of interest rate hedge products?

The purpose of IRHP’s are to protect customers from rising interest base rate increases on loans. However, since the base rate in the UK has dropped to an all time low of 0.5%, many businesses have been paying a higher rate than had they taken a loan without protection. There are typically four categories of IRHP’s sold by banks:

  • Swaps: these allow customers to fix their interest rate
  • Caps: these place a limit on any interest rate rises
  • Collars: these allow customers to fix their interest rate fluctuations to within a range
  • Structured collars: similar to collars in that interest rates are fixed within a range, but if the interest rate falls below the bottom of the range, interest rates may increase above the bottom of the range

Why did the Financial Conduct Authority (FCA) become involved?

In 2012, the FCA and well-known high-street banks agreed to undertake a review of all sales of IRHP’s since 2001. It was discovered that over 90% of sales of IRHP’s did not comply with regulatory requirements when sold to customers. As a result, there is now a redress scheme for businesses that were mis-sold these products. This could have occurred for example, where the customer was not prided with sufficient information about the products, or if the products were not appropriate for the business.

How do you know if you have a claim?

In the review, the FCA made a distinction between sophisticated and non-sophisticated customers. Small businesses that were unlikely to understand the risks associated with such financial products and met certain criteria were classed as non–sophisticated customers. This is important distinction because it will determine the basis of any claim. We will work with you to discuss these issues and assess the strength of your claim.

What compensation can I expect?

The aim of the redress scheme is to put customers back in the position they would have been had the failings of the bank had not occurred. Generally, the bank will calculate loss under three heads: basic redress; interest; and consequential loss. In any event, compensation could be in the thousands.