McHale & Co. Solicitors Blog

Interest Rate Hedging Products - Judicial Review of FCA Review

We have been complaining for some time about the mechanics of the Financial Conduct Authority ('FCA') Review. Our main concerns are the lack of transparency and independence of the process.

Currently the banks that sold customers IRHPs are now making decisions on (a) whether or not they were mis-sold and, if so, (b) the amount of redress to be awarded. Clearly that appears unfair, but to give the process legitimacy the notion of an "independent reviewer" was introduced.

The banks, and in fact the FCA, always cite the existence of the "Independent Reviewer", whose job is supposed to be to ensure that the bank has assessed the mis-sale and redress amount in line with FCA guidance. However, as the Independent Reviewers are paid by the banks and is often from one of the banks' biggest business partners, (for example it is KPMG in the case of RBS) , it is difficult to naturally trust the decision making process. What adds fuel to this is the FCA's and banks refusal to publish the guidance against which the mis-selling and redress amount is being measured against. Time and again we have asked the banks and the FCA for a copy of the "rules of the game" and incredibly they have refused to do so!

We are delighted that Holmcroft Properties Limited, (a client of a leading London Firm of Solicitors) has now made an application for permission for there to be a judicial review of the FCA Review. The judge at the hearing, which is listed next month, will have to consider whether or not the FCA has prevented the banks from unduly influencing the Review process by inappropriately finding that products were not mis-sold and also reducing the amount of redress offers made. It is basically a chance for the courts to decide if the FCA has being doing its job in policing the scheme properly.

If the judicial review is then heard and is successful, it would allow businesses who have gone through the FCA Review process, and have had unsatisfactory findings made, the right to hopefully have their cases looked at again. This will inevitably lead to a large increase in compensation to customers.

We wish Holmcroft and their legal team every good luck in their endeavours which will hopefully lead to real justice finally for many businesses and individuals whose lives have been blighted by this banking scandal.

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