The process for compensating victims of mis-sold interest rate hedging products will come under challenge at a full High Court hearing, after a property company was granted permission to bring its claim that the review of its case by auditor KPMG was procedurally unfair.
Kenneth Parker J granted Holmcroft Properties permission to seek judicial review of the handling of its case by KPMG, the independent reviewer appointed to oversee the redress scheme operated by Barclays following discovery by the FCA of widespread failings in the sales of interest rate hedging products by banks including Barclays. In its role as independent reviewer, KPMG is intended to assess whether Barclays is making fair decisions on mis-selling claims and the amount of redress to be awarded.
In accordance with the redress scheme, Barclays reviewed its sale to Holmcroft of hedging products and concluded that they had been mis-sold. It offered redress of more than £440,000, but rejected a claim for consequential losses. KPMH reviewed that decision, and concluded the redress offered was “appropriate, fair and reasonable”. It is that decision which Holmcroft is attacking in these proceedings.
James Oldnall, partner at Mishcon de Reya who led the case for the claimant, said in a statement: “KPMG’s argument, also echoed by Barclays and the FCA, was that its role was a matter of private contract and as such it was not subject to procedural fairness. The judge’s remarks today are a strong indication that KPMG’s role, and indeed the bank’s process, is not solely a private contractual matter but has an important public function and must be fair.
“In terms of the implications, this should certainly lead to banks and independent reviewers prioritising fairness. From the perspective of our client, it means that we now have the opportunity to argue a case for appropriate compensation that is commensurate to his loss.”
Holmcroft Properties Ltd v KPMG LLP Administrative (Kenneth Parker J) 24 April 2015
