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Second chance for victims of interest rate swaps mis-selling to claim compensation
A claim by a Tozers’ client against Barclays for the mis-sale of an interest rate swap product has made national news. The Times and Reuters have both reported the decision of His Honour Judge Havelock-Allan QC to grant our client permission to add a new claim that Barclays was unfair in the way it conducted the FCA review of the sale of the swap, in this case a structured collar. Barclays had made a final offer of compensation which our client considered insufficient but there was no mechanism within the review itself to challenge that outcome.
The ruling is important because it gives businesses which have been the victim of interest rate swaps mis-selling a second chance to claim damages if the bank has failed to conduct the review process correctly. And they can do so even when their claim against the bank for the original sale is already time-barred.
The potential impact of this decision is huge for banks which have been making low offers or putting customers into alternative, often still unsuitable, interest rate hedging products. It is estimated that thousands of dissatisfied customers have been denied hundreds of millions of pounds of compensation which they might have received had the banks conducted their review differently. We anticipate that many of those customers will now wish to re-assess their chances of redress.