Britain's biggest banks narrowly avoided a major legal challenge today, when a High Court judge dismissed a case relating to the mis-selling of rate swap products.
The case could have had far-reaching implications for a multi-billion pound scheme to compensate victims of mis-sold interest rate swaps.
But the High Court today dismissed an application from Mishcon de Reya to look into the way KPMG had reviewed a case relating to alleged mis-selling of interest rate products by Barclays, saying there was no basis that KPMG had been in violation of any public law duty.
The High Court also said there was clear evidence that KPMG had carried out the work it had been required to do.
Mishcon de Reya had been acting on behalf of Holmcroft Properties, a nursing home operator, and had argued that KPMG, which was appointed by Barclays as an independent reviewer to oversee a compensation scheme for mis-selling, did not adequately compensate Holmcroft for its swap-related losses.
In 2012, the Financial Conduct Authority (FCA) instructed nine banks, including Barclays, to nominate reviewers for their compensation schemes, and since then more than 11,000 firms have been paid £1.8bn in redress for selling products that led to big losses for smaller firms.
If the judges had sided with Holmcroft, the case could have led to dozens of other businesses also claiming that they were poorly compensated by independent reviewers. Mishcon de Reya, which is acting for Holmcroft, has previously said it has litigation funding in place "to assist other businesses in commencing their own legal action".
Commenting on today's decision, however, James Oldnall, the lawyer at Mishcon de Reya who led the case, said while the firm was "disappointed", lawyers believed the judgement "offers very credible grounds for appeal and will be making an application to do 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," Oldnall added.