McHale & Co. Solicitors Blog

Interest Rate Swap Claims - Fact finding meetings

I have now been involved in two fact finding meetings with clients. The banks had a “testimony gatherer” who was independent of the review process, an assistant and also present was an independent party who was a KPMG representative.


I must say that the experience was pleasant enough but I am not convinced that the process has been well thought out and is the most effective use of time.


I make a number of observations about the process as follows:


1.    The meeting was “without prejudice”. This was not stated at the outset but was quickly established.

2.    The fact that the meeting was taking place at all was indicative of the “sophistication test” having been passed; when I sought clarification on this I was told that those present from the bank believed that this was the case but they could not categorically confirm this.

3.    On the basis of “2” above I steered the fact finding away from too much exploration of the clients’ previous business experience.

4.    The “testimony gatherer” was keen to explain that he was not involved in the review process itself and had not looked at the specifics of the client’s case. Whilst this may appear attractive at first, it meant that he didn’t know what “testimony” might help the ultimate reviewer.

5.    The bank had failed to give full disclosure of all the documents in the case to us in advance of the meeting despite numerous requests. They did not have the client’s file to hand and so the client was struggling to know whether they needed to specifically deny any version of events that may ultimately be put to the reviewer.  A hypothetical example: the client cannot recall any presentation being given. The bank have a note on the file of the fact a presentation was given. The client doesn’t mention the fact that there was no presentation. The reviewer is left with a contemporaneous document asserting that the presentation took place and no specific denial of same. They may reasonably conclude that there was a presentation. This would be wholly unfair. (I am working on the presumption that the evidential test that the reviewer will apply will be that of the balance of probabilities).

6.    The “testimony gatherer” said on a number of occasions that the process was the clients opportunity to supply the reviewer with “additional information”. When questioned what the other information was and what this information would be “additional” too he did not know. (We must presume that it is the banks version of events and documents taken at their greatest evidential height.)

7.   The “testimony gatherer” said that the process was to “share” information. Bearing in mind that the bank had no documents and that none of the people from the bank who were involved in the SWAP sales were there this was certainly one way sharing!

8.    The meeting was recorded and we are to be sent a copy of the recording shortly.

9.    The tape is also to be sent to the reviewer who will then decide one of the following outcomes:

(a) Bank and the independent reviewer deem that all regulatory requirements are met you will receive no redress.

(b) If regulatory requirements are met, but the bank and independent reviewer deem that you are entitled to redress, you will be offered redress.

  (c)  If you purchased a more complex product, the bank and review will make a suitable proposal for redress.

10.  No timescales for the next stage were given. (Reference was made to the FSA pilot findings in this regard which is not too promising).

11.  We are going to compile detailed submissions to forward to the reviewer. Insofar as the testimony gathering is to get information to send to the reviewer, I think that written submissions are more appropriate. Indeed for my next such meeting I think I will prepare submissions in advance and supply them to the bank at the meeting).

12.  I wouldn’t recommend that a client attend such a meeting unrepresented.

13.  I am left more concerned by the lack of information that the reviewer will have if submissions are not provided to them. This will clearly lead to unjust decisions.

14.  A full exchange of documents before such meetings would be helpful and the process should be tweaked in this regard. There is a reason why judges ask for discovery and disclosure before witness statements are exchanged and this procedure should be followed here.


I will let you know more when we hear back from the bank. Anyone wanting advice before a meeting, please contact us here.

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