Three small companies have been defeated in a David and Goliath-style court battle with big banks.
The Court of Appeal today ruled that banks did not owe firms a “duty of care” when deciding how much to compensate them for interest rate swaps mis-selling.
Property investment company CGL, the owners of a collapsed Welsh hotel business, Jacqueline and Adrian Bartels, and WW Property Investments were trying to sue RBS, Barclays and RBS-owned NatWest respectively.
The businesses believe they were under-compensated by the lenders through a redress scheme ordered by the Financial Conduct Authority (FCA) in 2012.
Each of the parties brought civil claims against the banks, claiming that they were under-compensated through the redress scheme and that their cases were not handled with reasonable care and skill.
The three claims were separately thrown out by the High Court last year. And today, with all three cases bundled together, the Court of Appeal dismissed their cases, ruling that the banks did not have a “duty of care” under the FCA redress scheme.
David McIlroy of Forum Chambers said: “The Court of Appeal’s decision today will come as a great disappointment to many small companies.
“It could well mean the end of the line for any attempt to get proper compensation for the mis-selling of swaps which occurred on an industrial scale before the financial crisis.”