Customer’s Direct Challenge to Bank’s Compliance with the FCA IRHP Review’s Specification is Permissible (Suremime Limited v Barclays Bank Plc)


Further, due to the wider importance of these claims, there are other compelling reasons why they should be considered at trial.


On 30 July 2015, HHJ Havelock-Allan QC sitting in the Bristol Mercantile Court, granted Suremime Limited permission to amend its Particulars of Claim to include two new bases of claim, namely:

a) that, in agreeing to provide redress in accordance with the specification for the conduct of the FCA Review, the bank owed the claimant a duty in tort to conduct the review in accordance with the specification it had agreed with the FSA for the conduct of the FCA Review; and

b) that, in entering into agreements with the FSA, the bank agreed to confer on customers whose transactions were reviewed the benefits of such a review and redress (if appropriate) and, in accordance with the principles explained in White v Jones [1995] 2 AC 207, owed a duty to the claimant to implement the review process properly.

These bases of claim were alleged to have the same measure of damage as if the Contracts (Rights of Third Parties) Act 1999, which was specifically excluded with the agreement between the banks and the FSA, applied.

The claimant’s underlying argument, which will not be determined until trial, is that Barclays has not made an inadequate offer of redress because of an allegedly unjustified assumption as to what kind of swap the customer would have entered into if the original transaction had conformed to the standards and principles agreed between Barclays and the FSA as the basis for the FCA Review.

In determining whether to grant permission, the Judge was concerned with the test that applies on an application to strike out or an application for summary judgment. Namely, do the arguments cross the arguability threshold of “a real prospect of success” or, otherwise, is there a “compelling reason” why the case or issue should be disposed of at trial.


Whilst dismissing the prospect of a third cause of action based in contract (for lack of any consideration), the Judge found that both of the alleged tortious duties were more than merely arguable and, further, due to the number of other cases that involved similar issues there was also a compelling reason that they should be considered at trial.

In finding the tortious claims were more than merely arguable, the Judge held that:

a) he could not be confident that all relevant facts were known and therefore the Court should be hesitant to determine the claims at this early stage;

b) because a public law right of action may exist (it was held that this point was yet to be decided), this did not necessarily preclude a private law duty of care also being owed; and

c) the fact that the claimant can sue (and was doing so) for the original mis-selling did not provide a reason to find against granting permission to pursue these additional claims. Importantly, the Judge commented that

The FCA Review was intended to provide a route to fair and reasonable compensation without customers having to sue for mis-selling. Those who stayed their hand and have not sued for the mis-sale in the hope of deriving a satisfactory result from the FCA Review process, but now allege that the specification of the FCA Review has not been faithfully applied, may be left without any remedy if they did not agree a standstill or moratorium with the bank which sold the swap and the mis-selling claim has since become statute-barred. Whilst that is not this case, it is a relevant consideration because it is part of the wider landscape in which the Court will have to assess whether the banks should owe a duty of care to customers in their conduct of the FCA Review”;

d) it was arguably correct to say that these tortious claims are necessary to cover a lacuna in the law which arises because the FCA Review does not distinguish between a private person (who may have a right of action under s138D of FSMA to claim for a breach of DISP 1.4.1R if the specification of the FCA Review has not been applied) and a corporate customer. This discrepancy militates in favour of a finding that allows for a private law cause of action for corporate customers (for which s138D does not cater); and

e) the fact the FCA can enforce compliance through the independent reviewer of the FCA Scheme does not preclude the application of the principles of White v. Jones.

In relation to the “compelling reason” limb of the test, the Judge agreed with the claimant’s submission that whether a customer has a private law right to enforce compliance with the FCA Review specification as opposed only to a public law right to challenge decisions taken during the FCA Review is an issue of some public importance and ought to be decided at trial.

He stated:

“… the question whether (and if so what) private law remedies accrue to customers who have participated in the FCA Review is a question of some public importance. It is one that affects a number of swaps claims in which an unacceptable Offer of Redress is alleged to have been made. Whilst in my judgment it is not possible to imply a binding contract between the claimant and the Bank on the facts of this case, there is a compelling reason why the new claims in tort should be permitted to go forward to trial. […] The new and alternative bases of claim in tort arise in a factual matrix which is likely to prove to be the same or very similar to that in other cases. Thus, in my view, the tort claims merit argument at the trial, rather than being throttled at birth by a refusal of permission to amend.”


Arguably, this permission to amend gives encouragement to customers to pursue litigation in order to challenge the redress offered by a bank under the FCA Review if they consider the process has not been properly followed.

In particular, corporate customers may look to argue that a private law action exists (akin to s138D of FSMA) when alleging that a bank failed to properly comply with the FCA Review’s specification.

However, the inevitable portrayal of this decision as paving the way for significant appeals of banks’ offers of redress made pursuant to the FCA Review via the Courts, may overplay its effect. In truth, this is a cautious decision in respect of an application to amend a particular claimant’s particulars of claim to include additional bases of claim against the relatively low summary judgment thresholds.

Naturally, given the reference to the potential wider importance in the Judge’s decision, it is likely to receive significant further attention in due course.

Suremime Limited v Barclay Bank Plc [2015] EWHC 2277 (QB)