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CGL Group Limited v Royal Bank of Scotland – how will it affect the Global Restructuring Group complaints process?
The Court of Appeal has handed down judgment of the long awaited appeal in (1) CGL Group Limited; (2) Jacqueline Bartels and Adrian Bartels; (3) WW Property Investments Limited v. (1) The Royal Bank of Scotland plc and National Westminster Bank plc; (2) Barclays Bank plc; (3) National Westminster Bank plc  EWCA Civ 1073.
The appeal concerned a number of the bank’s customers whose claims were linked because they each turned on the same issue – whether banks owed a duty of care to customers to carry out their review of the sale of interest rate hedging products in accordance with the terms agreed with the FCA.
Each of the customers had been sold a complex interest rate hedging product by the bank such as an interest rate swap or structured collar. The customers agreed to participate in the bank’s review which failed to result in satisfactory redress. Some received redress for the cost of the swap payments but not the consequential losses which arose from being kept out of funds.
The customers then claimed the bank had a duty to them to follow the terms of the FCA review which it breached by not considering their complaints properly. They argued that if it had, they would have been awarded at least the full cost of the swap and their consequential losses.
The Court of Appeal rejected the customers’ arguments, deciding that the banks did not owe a duty to customers to conduct the review in accordance with the terms of the FCA review and so the banks original redress offered would stand.
CGL’s claim was so important because it gave a second chance to many customers who were out of time to bring a legal claim in relation to the original sale of the swap, most of which were sold before 2011 and so outside the 6 year time limit. They could instead bring a claim which ran from the date of the bank’s redress determination in the review which will have been after 2012.
This decision is hugely disappointing for those customers attempting to obtain proper compensation for the mis-selling of interest rate hedging products. Those customers without a live claim for the original sale now face limited prospects.
This decision will affect RBS’ complaints process regarding the treatment of customers forced into their Global Restructuring Group (GRG). It will mean that if customers are unhappy about the outcome of that complaints process they will not be able to bring a legal claim in relation to it. Because most will also be out of time to claim directly based on GRG’s actions, this complaints process could be a last chance. This makes it vital to get the best possible outcome.
There are some important lessons to be learned from CGL v RBS for those currently participating in the GRG complaints process:
- If possible do not allow your underlying claim for actions of the bank to run out of time. Without the threat of a legal claim the bank are less likely to award redress.
- You will only get one attempt at presenting your complaint within a review process so make it count. There is effectively no appeal
- Set out your complaint in full in writing. Do not rely on the bank to come to its own conclusion about what happened because once it does, it is almost impossible to change their mind.
- Include expert evidence of consequential losses where appropriate. The banks will require proof of consequential losses to a legal standard.
If you need any assistance regarding this matter, please speak with our team of dispute resolution solicitors.