Interest Rate Hedging Product (“IRHP”) Litigation At the High Court

December 14, 2016

I recently noted some of the more important cases that will be heard at the Court of Appeal (see here).  This article covers the cases that are expected to go to trial shortly.

Why am I talking about IRHP cases that are going to trial?  Three reasons:

  1. WW Properties Ltd v National Westminster Bank plc
    [2016] EWHC 378 (QB) may set a precedent that a bank is liable for not undertaking the FCA review properly.  There are a lot of people out there who received an unwelcome outcome in the FCA review into the historic sale of IRHPs.  Those people would generally have six years from the date of their final offer to bring proceedings.  As such, there is likely a body of cases out there that can still succeed.  Muldoon Britton is presently working on such cases.
  1. Both Property Alliance Group Ltd v Roya Bank of Scotland Plc (“PAG”) and Hockin v Royal Bank of Scotland Plc may both set down precedents about how GRG and LIBOR claims are dealt with.  It would appear from the WW Property case that a GBP sterling LIBOR claim against RBS will be difficult to succeed in, but they both have substantial GRG claims.  They both have swap claims also.  PAG’s case has been to a very substantial trial and judgment was expected in December 2016, though this time-table may now change.  Hockin was due to go to trial in January 2017, but this appears to have been stayed.  GRG cases are likely to take up a lot of lawyers’ time over the next four years.  The FCA scheme to automatically refund some GRG fees has reduced the number of potential claims a lot.
  1. Claims still on-going. There were a large number of claims issued in 2012/2013 which were then stayed (the case was agreed to be suspended) pending the outcome of the FCA review.  RBS more than any other bank has been accused of manipulating its reviews to ensure that very few full tear ups were given.  I had a 100% success rate on IRHP cases that I have run.  But post June 2014 it was clear that unless an astonishingly good claim had been put in, the Bank was going to reject the claim or offer an alternative product.  The FCA has suggested that it may investigate this.  Muldoon Britton has a substantial IRHP case that was stayed.  As the bank offered an alternative product it is expected that this case will now go to trial.  Law firms around the country are in the same position.  RBS will not settle cases, probably because they have won every case that has gone to trial to date.  They have not faced off against Michael Muldoon, Kara Britton or Kalvin Chapman – we are a formidable team.

There are, as noted, two big cases that have been reported on widely – PAG and Hockin.  An important RBS case (but not a swap case) is the Clive May v RBS case, which at present appears to be on track for being heard in 2017.


PAG is a big Manchester based property company[1].  The case was a substantial claim and has dominated the banking litigation news for the last three years.  At one stage RBS even had an injunction taken out to remove PAG’s lawyers from the case[2]!  The case involved LIBOR and the case required RBS to disclose a lot of its internal communications, reports and related material.  The case had eight judgments handed down, before trial.  That is, to say the least, exceptional[3].  The case was to be heard by Mrs Jutsice Asplin, with Tim Lord QC & Kyle Lawson of Brick Court chambers heading up the legal team for PAG.  The case was a long case and a lot of evidence came out about LIBOR manipulation by the bank.  It appears that from what has been suggested that it is unlikely they will succeed on the LIBOR issue.  We do not have an understanding of how their IRHP claim went.  Their biggest claim, it would appear, is the GRG claim.

The case produced a lot of unexpected results.  The Bank had a manual that confirmed if a business sued the bank over IRHPs then they must be sent to GRG.  At almost all GRG and LIBOR meetings with senior executives at the Bank a lawyer from the bank’s external law firm would be present taking notes.  That meant that nothing in those meetings was capable of being disclosed in litigation, which severely hampered PAG’s legal team.  Ultimately, the result of this case will have a big impact upon future GRG cases.

As noted by Muldoon Britton, the FCA scheme with RBS is an automatic refund of GRG fees does not include all fees, nor does it include the losses caused by how GRG treated its customers.  It is therefore likely that 1) a number of people potentially may sign away their rights to sue by accepting the fee refund and 2) a lot of the bigger GRG cases will have to be issued in court and go to trial.  The judgment in PAG was expected in December so that Hockin could start in January (it was also being heard by Mrs Justice Asplin).  That may not now happen.

If you have a GRG case, and the automatic refund of fees does not cover all of your losses, you should seek independent legal advice before accepting the refund.

Hockin v RBS

 This case is an astonishing case.  The Hockin family had a substantial property holding company – London & Westcountry Estates – which owned and managed 27 business parks in south-west England and had about 300 tenants.  The Bank sold the Hockins a £45 million swap and very shortly afterwards put them into GRG.  GRG sold all of their assets and put the company in administration.  When the Hockins wanted to sue they asked the administrators for the right of action to be assigned to them.  The administrators said no.  A big case saw the Hockins win[4].

The Bank recently tried striking out key parts of the claim, and this was resoundingly rejected by the High Court[5][6].

The Hockin case, like PAG, is a mix of GRG, LIBOR manipulation & the selling of swaps.  It is different to PAG because the swap was so substantial, so toxic and it directly led to GRG.  The case also has elements of the company’s assets being sold off to Isobel, which was a fund set up by RBS to buy toxic assets from RBS.  Unusually, Isobel has not features much litigation, despite how toxic the entire debacle is/was[7].

Hockin will therefore be another severely damaging case for RBS to have heard.  The manipulation of customers, the selling of toxic swaps to create profits, the unfair practices in GRG and the selling of customers’ assets to an RBS owned fund will make this case a difficult day in Court for RBS.

Clive May.  There is little in the way of judgments being handed down in the Clive May case.  There are a few articles.  Mr May owned a successful business.  He was sold an EFG loan by RBS.  Mr May alleges that this caused his business to become insolvent.  We understand that it will be heard in about July 2017.  You should keep your eyes open.  Mr May is a prolific tweeter, and has a lot about RBS, RBS litigation and his case on Twitter[8].


The cases that are due to be heard, coupled with the cases due to be heard at the Court of Appeal will be important cases.  RBS has not looked to settle many cases.  It was a surprise that both PAG and Hockin did not settle, simply because the cases will cause such drastic reputational damage to RBS.

The decisions will have an important impact on clients who look to bring proceedings against the banks.  Almost every HBOS & Lloyds LIBOR cases have been settled.  There are a few HBOS cases that were being pursued, and if they go to trial – coupled with the HBOS/Lloyds shareholder claim – could mean further damaging evidence coming out.

RBS has tried to stem some of the damage.  It has settled a number of the shareholder dispute cases, but has not settled about 50% of them by value.  RBS agreed to refund some fees on GRG to customers.  Muldoon Britton is concerned that the acceptance letter for this refund may (but not necessarily will) require an undertaking that the refunded fees are being accepted in full and final settlement of any and all claims against NatWest, RBS and RBS Group, whether said claims are known or not known.  That is the standard acceptance for RBS.  But, if a customer can accept the automatic refund of fees and use that to fund a GRG case there is likely to be a lot of GRG litigation – but the outcome of PAG and Hockin will have a big impact upon that.

If you have any questions about bringing an IRHP case (whether for the direct sale or the outcome of the FCA review), a GRG case, a HBOS LIBOR case, a Lloyds LIBOR case, a case involving Lloyds’ use of BSU and sale to Cerberus, then please contact Muldoon Britton today.  We would be happy to discuss your case with you.



[1] PAG website

[2] The Lawyer 29/01/2016 “RBS declares war on Cooke Young Keidan in LIBOR case”

[3] PAG cases


[2014] EWHC 4308 (Ch) – 24 November 2014


[2015] EWHC 321 (Ch) – 19 February 2015


[2015] EWHC 322 (Ch) – 19 February 2015


[2015] EWHC 1557 (Ch) – 8 June 2015


[2015] EWHC 2635 (Ch) – 10 September 2015


[2015] EWHC 3187 (Ch) – 5 November 2015


[2015] EWHC 3272 (Ch) – 13 November 2015


[2016] EWHC 207 (Ch) – 27 January 2016


[4] see Hockin v Marsden [2014] EWHC 763 (Ch) 19 March 2014


[5] see Hockin v Royal bank of Scotland Plc [2016] EWHC 925 (Ch)


[6] See also Ian Fraser 26/04/2016 “RBS fails to get two key elements in £33m swaps case struck out

[7] Plymouth Herald “Plymouth couple fight off bank bid to have £33million compensation claim rejected”

[8] Clive May, Twitter


Get in Touch

With years of experience working in UK immigration and Litigation law, our advisors can help you understand the process and take the right steps toward obtaining your goals. Get in touch today.