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Test cases for the FSA redress scheme in the interest rate product mis-selling scandal are being finalised.
Litigators taking on the banks on behalf of businesses affected by mis-selling expect the process to get underway within weeks.
Carter Ruck is the latest firm to declare its involvement in the glut of mis-selling litigation that came out of the FSA’s findings of “serious failings” by the big four banks over the sale of interest rate hedging products (2 July 2012). The City firm said it has around 50 cases with five new enquiries a day and has had to set a £200,000 minimum value of claim.
Some of its instructions, which cannot be disclosed for confidentiality reasons, are on multi-million pound cases.
Its clients range from Middle Eastern royal families to sole traders who are claiming to have been mis-sold interest rate hedging or more complex products.
The firm did confirm that it is has dozens of cases against Lloyds TSB, HSBC, RBS and Barclays, as well as several instructions to act against other banks such as Santander, Clydesdale and Yorkshire.
The firm’s financial mis-selling practice team is led by partners Adam Tudor, Claire Gill and Ruth Collard, with associate Stevie Loughrey and newly recruited solicitors Richard Hodge and Zoe Brocket.
The Carter Ruck team has indicated that it has been in contact with RJW’s Fraser Whitehead, who wants to establish a steering group from firms suing the banks (15 October 2012).
Carter Ruck has already settled a number of cases, agreeing compensation, reimbursement, legal costs and the waiving of break costs in terminating the product.
It is also offering to run some cases on conditional fee arrangements (CFA) where appropriate, with after-the-event (ATE) insurance should the claim be unsuccessful, lowering the risks associated with litigation for small and medium businesses in financial difficulty. However, most of its clients in this area are on a fee-paying basis.
The Lawyer understands that a number of Carter Ruck’s clients have been selected to take part in the FSA redress pilot scheme, which will look to compensate the victims through an agreement with the banks and then apply those general values to the remaining raft of cases.
The aim is to reduce the need for lawyers in the process for small and medium businesses and give them easy access to compensation.
But lawyers have been critical of guidance from the FSA and are claiming this process is still “opaque”, despite being imminent.
One source said: “It’s still not at all clear how this pilot exercise is going to work. Are they going to share any information provided? What is favourable redress? We’re pressing for more disclosure, because for a lot of these customers, time is of the essence. They can’t afford to sit around and wait.”
Meanwhile, The Lawyer understands that Barclays has now instructed Eversheds to carry out a fact-finding role in connection with those cases going to the FSA redress scheme.
The firm is not involved in the litigation aspects, which is being handled by Matthew Arnold & Baldwin and Simmons & Simmons.