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Litigation for Financial Services

The focus of our litigation and dispute resolution team is on providing results-driven solutions that minimise the risks and realistically assess the potential rewards. We pride ourselves on being partner-led and ensuring that there is a strong and continued presence of the lead partner on every assignment.

Conflict free

Our team enjoys a profile and reputation for quality. We have an independent position in the market and rarely face the kinds of conflict issues which mean that we cannot act against large institutions. We have specialist expertise in a wide variety of financial services disputes.

Mis-sold interest rate hedging products

Our dispute resolution team is experienced in providing expert legal, commercial and strategic advice in relation to claims arising from the mis-selling of interest rate hedging products. We are generally free from the type of conflict issues which prevent other city firms from litigating against the banks and other financial institutions. 

Read a recent article on the banks' approach to handling IRHP complaints.

Our services may well be of interest to you, if you have entered into any type of interest rate swap agreement. 

What is an interest rate swap?

In broad terms, an ‘interest rate swap’ is a form of financial product designed to reduce the risk of interest rate fluctuations. They were typically sold by UK high street banks to small and medium sized businesses with business loans.

While appearing straightforward, the products were actually complex and often beyond the needs or understanding of many customers. Many financial institutions failed to adhere to their “know your customer” obligations, or to explain all the key features of the products, which resulted in the mis-selling of the interest rate hedging products.

Limitation period for bringing claims

Generally, the customer will not be able to bring a claim after 6 years from the date the contract was signed. However, we can help you to work out whether your claim is time barred.

What other products have typically been mis-sold to customers?

  • Caps – in exchange for a one-off premium, caps are meant to limit a customer’s exposure to rising interest rates.
  • Collars – in principle, a collar would limit a customer’s exposure to interest rate fluctuations within a specified ‘cap’ and ‘floor’ (i.e. maximum and minimum amount).
  • Structured collars – these products, in theory, should have enabled a customer to limit exposure to interest rate fluctuations; however, they were vulnerable to higher rates if interest rates fell below a certain point.

Mis-selling

The Financial Services Authority (as it then was, now the Financial Conduct Authority) conducted an in-depth review into these products, and concluded that while interest rate hedging products were appropriate in certain circumstances, many products were particularly complex and required in-depth knowledge and understanding on behalf of the customer.

Selling techniques were also severely criticised, including:

  • Inadequate explanations of cancellation costs;
  • Failing to find out customers’ understanding of risk;
  • Non-advised sales straying into advice;
  • Mismatching the amounts and/or durations of the products with those of the underlying loans; and
  • Too much reliance on incentives and rewards, which created a conflict of interests

Redress

We are able to advise in relation to all forms of dispute resolution relating to the mis-selling of interest rate swaps, including:

  • High Court litigation – generally the only route available to ‘sophisticated’ investors and/or those with claims over £150,000;
  • Claims to the Financial Ombudsman; and
  • Claims under the regulatory redress scheme now operated by the FCA.

Useful Information

Click here for more information about the FCA investigation into interest rate hedging products and the redress scheme.

LIBOR and ISDAfix

What is LIBOR?

The London Interbank Offered Rate (or LIBOR) is a benchmark interest rate based on the rates at which banks lend unsecured funds to each other.

What is ISDAfix?

ISDAfix is the leading benchmark for annual swap rates for swap transactions worldwide. The FCA has recently announced that it is joining the international investigation into the potential manipulation of the ISDAfix.

Our expertise

With our combination of regulatory and financial services litigation experience, our team is well placed to provide expert legal, commercial and strategic advice in relation to investigations and civil and criminal proceedings arising out of the ongoing regulatory investigations in respect of the manipulation of LIBOR and ISDAfix.

We are able to advise individuals, SMEs and market counterparties in relation to potential mis-selling claims arising out of the manipulation of these rates.


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Contact

tel: +44 (0) 20 7628 2000
10 Finsbury Square, London, EC2A 1AF
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Who should I contact?

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Peter Wright
Partner
Direct dial: +44 (0)20 7614 2680
pwright@foxwilliams.com

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Gavin Foggo
Partner
Direct dial: +44 (0)20 7614 2543
gfoggo@foxwilliams.com

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Tom Custance
Partner
Direct dial: +44 (0)20 7614 2508
tcustance@foxwilliams.com

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Sona Ganatra
Partner
Direct dial: +44 (0)20 7614 2544
sganatra@foxwilliams.com


Accreditations

  • Top Ranked Chambers UK 2014 - Leading Firm
  • Ranked in Chambers Europe 2013 - Leading Individual
  • Ranked in Chambers Global 2014 - Leading Firm
  • Legal 500 - Leading Firm
  • The Lawyer UK 200 - Listed Firm
  • The Law Society Excellence Awards 2012 - Shortlisted
  • Investors in People - Bronze