Mis-selling of IRHPs

Mis-selling of Interest Rate Hedging Products (IRHPs)

Pragmaticum has been involved from early 2012 in helping to highlight the scandal of the mis-selling of interest rate hedging products (IRHPs) by high street banks and helping to find an equitable means for compensation.

In conjunction with the FSB, Guto Bebb MP who leads the All Party Parliamentary Group for Fair Business Banking, and the claimant action group, Bully-Banks, Pragmaticum lobbied the FCA and HM Treasury on behalf of claimants, and continues to do so.

Pragmaticum acts for the claimant only, it does not have any relationships with banks (for example we do not have an insolvency practice) and so is not conflicted in acting for any client.

Pragmaticum are preferred experts on financial and consequential loss to Bully-Banks and gave an address at its conference on Consequential Loss in February 2014, and recently in Torquay in January 2016.

From its experience in preparing claims for a wide range of businesses arising from different causes, Pragmaticum is well qualified to identify and quantify the consequential losses that have been caused by mis-sold interest rate hedging products for the FCA review. More recently Pragmaticum has been helping customers “repair” consequential loss claims they themselves have submitted but which the banks have dismissed on a range of technical grounds.

It is only after receiving the detailed and often complex redress review decision from the bank that the customer fully appreciates the complexity of the subject and the perversity of the FCA suggesting that professional advice is not needed to properly prepare a claim for consequential loss.

Although Pragmaticum has achieved some noteworthy successes with clients from the major banks these have been the exception rather than the norm due to the inherently unreasonable approach the banks and FCA have taken to the review process and the interpretation of the underlying legal principles of consequential loss. Although Pragmaticum’s successes are highlights in an otherwise depressing landscape the overall negative position being experienced is not the fair outcome to which claimants are entitled.

The FCA review process does not have a formal appeal process so after an unsatisfactory review decision customers are directed to either appeal via the Financial Ombudsman Service – fine if you are a micro enterprise with a claim of less than £150K (approx.) or in the case of the majority have to take action through the Courts.

This is where up until now, through lack of money, the review process has reached its unsatisfactory end for most claimants seeking consequential loss. However Pragmaticum drawing on its significant wider experience has been able to bring together a proposition that will enable, through sensible litigation funding and quality expert advice, claimants to have their day in court and retain the majority of their claim.

For further information on funded legal actions, see our related page.

Pragmaticum Limited is regulated by the Claims Management Regulator in respect of regulated claims management activities; its registration is recorded on the website: www.gov.uk/moj/cmr