The case of Suremime v Barclays Bank is one to watch, as it raises the prospect that claimants may be able to bring claims for compensation against FCA regulated bodies for failure to properly award redress in the context of a past business review into the sale of interest rate hedging products ("IHRPs"). This would be a significant development if it transpires.
In this case, Suremime, which had been sold an IHRP in 2008, sought permission to amend an existing mis-selling claim against Barclays to also plead breach of contract and/or breach of duty of care by Barclays in conducting its IHRP Review and in preparing the offer of redress made to Suremime. Barclays argued that the claims had no merit, as it only owed a duty to the FCA in respect of the execution of the review and redress scheme, and sought summary judgment.
The Court granted Suremime permission to amend its Particulars of Claim to plead the allegations in tort, but not in contract. In doing so, the Court found that the contractual claim was bound to fail, as no consideration passed between Suremime and Barclays in respect of the IHRP Review – Barclays was bound by its agreement with the FCA to conduct the Review, irrespective of any act or omission by Suremime. In relation to the tortious claims, however, it was arguable that there was a lacuna in the law which a tortious right to sue for negligent implementation of the IHRP Review would fill. In particular, if it was found that the IHRP Review had been negligently conducted, those claimants who, in reliance on the review/redress scheme, did not issue proceedings for mis-selling, and whose claims were consequently time-barred, might be left without any remedy in the absence of such a tortious right. Further, although section 138D Financial Services and Markets Act 2000 might provide a statutory right of action if Barclays had failed to apply the specification of the IHRP Review, that right was granted only to private persons and not to corporate entities such as Suremime, leaving a gap in the remedy available. Finally, the Court considered that there was some merit in the argument that the case fell to be considered under White v Jones [1995] principles, as there was a discrepancy between those suffering loss (the customers mis-sold swaps) and the entity with the right to enforce the terms of the redress scheme (the FCA).
The judgment, of course, only granted permission for Suremime's claim to be pleaded, and it remains to be seen whether a court will ultimately decide that a duty of care was owed to it in respect of the IHRP Review. There have been numerous such schemes in recent years, with payments totalling several billion pounds already made. The outcome of this case may represent a way for those dissatisfied with what they have received to re-open an otherwise time-barred claim.
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