How credible is your claim for irhp misselling ?
As we await the outcome on a number of insolvent interest rate hedging product claims submitted through the banks voluntary FCA review scheme it is becoming apparent from new inquiries that many claims have submitted incorrectly.
The FCA give clear guidance on what can and can not be claimed along with the necessity to prove ‘but for’ yet it seems some advisers do not adhere to the rules;
Banks agreed to automatically add 8% annual interest on top of basic redress payments to reflect opportunity costs (loss of profits or interest). Given the economic context over the past years, this has represented a straightforward and fair alternative to putting together consequential loss claims for most customers.
If customers believe their lost opportunity amounts to more than the 8% simple interest they can put together a claim for consequential loss. All customers are invited to do this following the basic redress offer and there is no need to go to a claims management company.
Consequential losses are assessed by reference to established legal principles relating to claims in tort and breach of statutory duty. Customers should be aware of some of the legal tests, which in broad terms are:
- The mis-sale must have caused the loss (i.e. the loss would not have happened had it not been for the bank’s regulatory breaches).
- The loss must not be too “remote”. That is, the loss must have been a reasonably foreseeable outcome of the bank’s regulatory breaches (i.e. the bank could have reasonably foreseen that its regulatory breaches could result in those losses).
- Only claims that are supported by evidence will be considered. For example, documents that were created at the time the loss was suffered are likely to be very relevant.
The necessity to work with the former insolvency practitioner or an independent practitioner to establish ‘would the business have avoided insolvency but for the irhp’ is essential.
We have a case in progress where the bank admit the business would have avoided insolvency allowing the loss submission to detail a simple format to represent the Balance Sheet losses alongside Cash Flow losses so the bank can pay to re-instate the company to the register, engage a specialist valuer and step aside from Set Off (but remain as a Creditor)
This progress has taken many months but was achieved by simply following the non-legalistic approach of the review Guidance set out by the FCA.
The FCA irhp review is a wonderful opportunity to have the evidence analysed and assessed with no cost.
Should the bank not pay credible losses then of course it will be up to the court to decide if they were correct or not. We are now seeing many different legal arguments from Counsel detailing the banks obligations by entering the FCA irhp review and it is very clear to us that the bank are obliged to perform within the guidance detailed.
When you frame your claim, follow the guidance – simple.
Latest FCA irhp review loss statistics (Sep 2015)