Acceptance Of Settlement Offer As Part Of IRHP Review Precluded Subsequent Claim For Consequential Loss

Cameron Developments (UK) Limited v. National Westminster Bank Plc [2017] EWHC 1884 (QB)

In July, HHJ Moulder struck out a claim by a property developer (Cameron), for consequential losses allegedly incurred as a result of entering into an interest rate swap. The sale of the swap was reviewed as part of the Interest Rate Hedging Product (IRHP) review process conducted by the defendant bank (the Bank) (amongst other UK banks), pursuant to an agreement with the FCA. Having reviewed the sale of the swap, the Bank offered Cameron redress by way of an alternative product and a cash sum. Cameron was also invited to submit details of any claim it wished to make in relation to consequential losses not included in the initial offer of basic redress.

Cameron accepted the offer of basic redress. In doing so it acknowledged that acceptance represented "full and final settlement of any claims, liabilities, costs or demands that [it] may have against [the Bank] arising under or in any way connected with the sale of this IRHP as identified above. For the avoidance of doubt this applies to any past, present or future claims, actions, liabilities, costs or demands, regardless of whether or not you are aware of them at the date of this letter." Cameron subsequently submitted a claim to the Bank for consequential loss. The claim for consequential loss was rejected by the Bank.

Cameron subsequently made a claim for consequential loss in the courts. The claims brought by Cameron in the court proceedings alleged mis-selling; however, in view of the acceptance of the offer of basic redress, it was common ground between the parties that there could be no recovery of direct losses resulting from the sale of the swap. In order to pursue its claim for consequential loss, Cameron made allegations regarding the way in which the Bank conducted the review of the sale of the swap. The Bank applied to strike out the claim.

At the time the strike out application was heard (10 July 2017), a judgment of the Court of Appeal was anticipated in the case of CGL Group Limited v. The Royal Bank of Scotland plc, considered above whether the Bank owed a duty of care to customers when conducting the IRHP review. Whilst the CGL decision was awaited, it was agreed by all parties that it would be assumed for the purposes of the application that the Bank did owe a duty of care in relation to the IRHP review.1

The main issues left to be determined by the court included, first, whether...