Litigation Letter
Mis-selling financial products
CGL Group Ltd v Royal Bank of Scotland [2016] EWHC 281 (QB); SJ 24 March

The claimant purchased two financial products, a base rate collar trade and an amortising base rate swap, from the defendant bank in July 2006 and April 2007, respectively. The Financial Services Authority (“FSA”) subsequently conducted a review into the sale of interest rate hedging products and set up a redress scheme to compensate certain qualifying customers to whom such products had been mis-sold. By a settlement agreement entered into between the FSA and the bank, the bank agreed to conduct a sales review. The agreement expressly stated that a person who was not a party to the agreement, for example a bank customer who was a victim of mis-selling, would have no right to enforce the agreement whether in contract or otherwise. The bank informed the claimant that it fell within the parameters of the review and that it qualified for redress in respect of the collar trade, but not in respect of the swap. In January 2015 the claimant issued proceedings against the bank alleging that the products had been mis-sold. The bank applied to strike out the claimant’s claim, alternatively for summary judgment, on the grounds that the claims were statute-barred. In response the claimant, inter alia, applied to amend the particulars of claim to include a claim for breach of a duty of care to conduct the sales review in accordance with the undertakings given by the bank to the FSA and in accordance with the agreed methodology, to provide the claimant with appropriate fair and reasonable redress and to conduct the review with reasonable care and skill.