Member Article

Yorkshire farms and SMEs forced to sell assets due to FCA bank redress delays

Yorkshire businesses are being forced to sell assets so they can pay for mis-sold bank interest rate hedging products because of delays in the Financial Conduct Authority’s (FCA) Redress Scheme.

Several Yorkshire farms have had to sell land which has been in their family for generations to continue payments for mis-sold hedging products, while they wait for the banks to assess their redress claims, says director and dispute management team member at Lupton Fawcett Denison Till, Johanne Spittle.

Other businesses, mostly SMEs in Yorkshire and the North East, have had to take out further borrowing to continue payments.

Ms Spittle brought the first successful bank derivative mis-selling case against HSBC to trial in Leeds in 2011 for a Scarborough fish and chip shop and has advised scores of agriculture, leisure services, property and development businesses since as well as private individuals who were mis-selling victims.

Although the FCA says that £306 million had been paid out by Britain’s biggest four banks – Lloyds Banking Group, RBS, Barclays and HSBC by the end of January, its claims, that “redress is rapidly flowing to small businesses” is not the experience in Yorkshire or the North East, says Ms Spittle and other IRSA Solicitors Group lawyers handling similar claims.

Johanne Spittle (pictured), based at Lupton Fawcett Denison Till’s York office, said: “17 months after the FCA and banks agreed on the Redress Scheme, a maximum of only 25% of cases for businesses for which this applies have been assessed.

“I have clients who submitted cases to the banks in April 2013 but have still not been assessed.

“Those which have been assessed, and been paid ‘initial redress’ still await consideration of consequential loss claims where they have suffered other financial losses as a result of having the derivative payments deducted. This is not my idea of rapid.”

This was posted in Bdaily's Members' News section by Clare Burnett .