Mis-selling claims — new developments
A recent mis-selling case (Kays Hotels Ltd v Barclays Bank plc) has concerning new developments: (1) Kays Hotels was permitted to bring its claim based on a product bought in 2005, outside the normal six-year limitation period; and (2) Kays had already received compensation from the Financial Conduct Authorities Review, but in contrast to another recent decision (Clark v Focus Asset Management) was still allowed to pursue a claim against Barclays.
In 2005, Kays took out a loan of £1.34m with Barclays, repayable over 20 years at an interest rate of 1.5 per cent over Barclays’ base rate. It is alleged that Barclays representatives told Mr Saeed, one of its directors, that in order to draw down under the loan he would also need to enter into a complex interest rate hedging product. If the Bank of England base rate rose above 5.5 per cent, Barclays would pay the difference between the base rate and 5.5 per cent, but if the Bank of England base rate fell below four per cent Kays would be required to make additional payments to Barclays.
Kays brought its claim against Barclays in 2012, some seven years after the hedging product was entered into…
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