Guto Bebb, MP for Aberconwy and chairman of the All-Party Parliamentary Group on Interest Rate Swap Miss-Selling, has called an appeal of the recent decision to dismiss a judicial review application over KPMG’s role in compensating a company that was mis-sold interest rate products by Barclays. Commenting, he said: “This decision further illustrates the failures of the FCA’s review into the behaviour of the banks. Some 18,000 rate swap products were mis-sold, to unsophisticated customers who remain unable to claim appropriate compensation for their losses. There is a real risk that if this case is concluded here, the banks will take it as permission to return to the unsavoury practices that caused so much damage to so many small businesses. This decision must be appealed so that banks remain under the scrutiny of the law, and businesses are able to continue their fight for justice.”
Holmcroft Properties brought a judicial review of part of the bank’s redress process last year after it was offered £500,000 in compensation but not paid for any of the consequential losses it incurred when its payments rose dramatically under a rate swap as interest rates fell. After a long legal battle, the High Court judges found that whilst KPMG was hired to oversee Barclays’ redress scheme at the request of the regulator, it was not carrying out a public role and so could not be the subject of a judicial review.
James Oldnall, the lawyer at Mishcon de Reya who led the case for Holmcroft Properties said: "Whilst naturally we are disappointed with the decision, there are two aspects of the judgment that are surprisingly encouraging. The first is how finely balanced the decision appears to have been with regards KMPG's role as independent reviewer in the compensation process, and whether it was playing a public function. We always knew that it was a bold move to make an application for judicial review, and the fact that the hearing was granted at all was unexpected to many. Today's judgment makes it clear that this point is not clear cut We believe it offers very credible grounds for appeal and will be making an application to do so.
"The second encouraging part of the judgment is that it quite explicitly indicates that there is value in pursuing an alternative legal route to securing compensation for affected businesses, focusing on the issue of breach of duty This bodes very well for the Group Litigation action that we have commenced in this regard, which is generating significant interest that today's clarification on Holmcroft will only increase.
"So, whilst it is a shame that our client must continue to fight for fair compensation for his losses, this is by no means the end of the road."