Onside Issue 2 - Winter 2014 - 7

ONSIDE / BANKING Q & A

Q: Haven't the banks settled most cases now?
A: They are more receptive to settling small claims, but
for the ones involving larger numbers they are far more
obstructive and likely to offer alternative products as part
of the so-called compensation offer.

Q: There was always a time limit on these claims,
where are we on that spectrum?
A: Deadlines for settling these claims are routinely missed
by the banks, the last one passed in May 2014. We continue
to receive new enquiries every week and continue to submit
new claims to the banks, dating back as far as 2001. In
summary the compensation scheme is still open to new
claims and we have not been advised when it will "close".
In terms of cases that will need to be litigated, it is essential
that claimants do not let their claims drift. Whilst there are
always exceptions, a key date is six years from the day they
entered the product, or to be even safer six years from when
the bank commenced "advising" the customer to execute
the swap. If these dates have passed all is not lost as there
could be a "date of knowledge" argument. The best advice
is to speak to a specialist in this area.

Q: Has the Financial Conduct Authority stood up
to the banks on this issue?
A: Yes and no. They did push through the compensation
scheme, but the exclusions are wide and in our view unfair
and they have failed to address these shortcomings. In
addition, on numerous occasions the banks' behaviour
within the scheme has been highly questionable, such as
offering a different swap as compensation for mis-selling a
swap. In our view, the FCA has failed to tackle this.

Q: What about the companies in administration?
A: This is a major area of contention particularly as the
cost of the swap may have contributed to the demise of a
company, which is often the view expressed by the relevant
shareholders and directors. In these cases banks are usually
setting off any compensation they otherwise would be
paying to the company against their outstanding debt; they
are effectively benefiting from the compensation as opposed
to unsecured creditors or other stakeholders.
Furthermore, they know there is generally no cash available
to pursue litigation against the bank linked to a consequential
loss claim which potentially could be very large in the case
of an administration. In our opinion, they are not being held
to account for companies that have entered administration
due in part or entirely due to the cash pressure caused by
the mis-sold swap.

Q: Are politicians on the side of businesses?
A: In terms of addressing the shortcomings of the FCA
scheme and the banks' conduct within the scheme,
certain MPs have been excellent in standing up for their
constituents, such as Jack Straw in Blackburn. Others are
clueless. As a body they could have done much more on
this issue, whilst they continue to talk, the clock ticks down
in the banks' favour in terms of the time limits for being
able to litigate cases, the banks are fully aware of this, the
politicians haven't acted fast enough, so clearly they haven't
understood the point.

« The FCA did push through the compensation scheme - but the exclusions are wide
and unfair. Banks' behaviour has been highly questionable, such as offering a different
swap in compensation. In our view the FCA has failed to tackle this. »

7



Table of Contents for the Digital Edition of Onside Issue 2 - Winter 2014

Contents
Onside Issue 2 - Winter 2014 - Cover1
Onside Issue 2 - Winter 2014 - Cover2
Onside Issue 2 - Winter 2014 - Contents
Onside Issue 2 - Winter 2014 - 4
Onside Issue 2 - Winter 2014 - 5
Onside Issue 2 - Winter 2014 - 6
Onside Issue 2 - Winter 2014 - 7
Onside Issue 2 - Winter 2014 - 8
Onside Issue 2 - Winter 2014 - 9
Onside Issue 2 - Winter 2014 - 10
Onside Issue 2 - Winter 2014 - 11
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Onside Issue 2 - Winter 2014 - 31
Onside Issue 2 - Winter 2014 - Cover4
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