This was a hybrid case; involving part of the business being run as a partnership at will with the rest comprising limited companies.
Our clients, having seen coverage of work undertaken by Stuart Brothers in the financial press, sought advice in respect of an interest rate swap by an investment bank. They were unhappy about various its features, including overhedging, undisclosed breakage costs and the circumstances under which the bank would be able to withdraw what they saw as key benefits of the product.
This was a hybrid case; involving part of the business being run as a partnership at will with the rest comprising limited companies. The partnership claimants, as private persons, were able to bring an action against the bank for breach of statutory duty in respect of various breaches of the FCA Conduct of Business Sourcebook rules; in particular those relating to suitability and failure to communicate in a manner which was clear, fair and not misleading. Given that the FCA redress scheme was being undertaken at that time, we advised them to go through that scheme as they would be able to achieve their objectives (termination of the derivative without cost plus redress for historic payments and interest) without the need to incur what could be substantial costs in any litigation.
The FCA review gave inadequate redress. This necessitated Court action with applications for specific disclosure of documentation as well as for leave to adduce expert evidence as to banking practices relating to the sale of hedging products to customers such as our clients; all of which were successful.
The case was finally resolved just a few weeks before trial.