£50m milestone on mis-sold rate swap claims

INQUESTA HITS £50M MILESTONE

The value of compensation claims being pursued by forensic accountancy firm Inquesta for businesses which were mis-sold interest rate swap products has reached £50m.

Manchester-based Inquesta has seen the number of consequential loss claims it is handling surge from 50 to 67 in the past four months.

The total value of Inquesta’s caseload has rocketed over the period from £12.3m to £50.5m, and the firm has recruited two members of staff and a consultant to meet the increased demand for its services.

Recent cases include claims by care homes, children’s nurseries, hotel and nightclub operators and property developers. The claims range in value from £250,000 to £20m.

The businesses are claiming for losses they believe they incurred as a direct result of having to make payments on mis-sold interest rate swaps, or to fund hefty break penalties.

Inquesta director Rob Miller said mis-sold deals have had a ‘catastrophic’ effect on many businesses.

“We’ve seen a number of instances where other group or related companies have gone into liquidation, or projects that were intended to happen could not, directly as a result of the swap payments,” he said.

“We’ve seen significant growth over a short period of time, and anticipate this will increase further.

“Recently we have seen a number of people coming to us after they have submitted a claim themselves and had it rejected by the bank.

“The banks have set the burden of proof very high. There is a real need to provide documentary evidence to support the claims. Without this, most will fail at the first hurdle.

“Our team works to ensure all the supporting and relevant evidence to prove that the loss was caused by the swap is provided to the banks, together with a detailed calculation of the claim.

“We expect a long, hard fight, but are confident that justice will prevail and that the people affected by the scandal will be put back into the position they would have been in but for the swap.”

Interest rate swap products were sold on the basis that they would act as a hedge to protect smaller firms against rising interest rates.

However, when rates were reduced in 2008 and 2009, many firms were left with huge bills and penalties to get out of the deals.

Britain’s largest banks have so far paid out £1.2bn in redress, just a third of the £3.75bn set aside to deal with the issue.

Only 2,060 victims of mis-selling have so far made consequential loss claims. The banks have paid out an average of just £1,800 to 400 successful claimants.

Rob said: “Given that the banks have so far made 13,500 offers of redress for mis-sold interest rate swaps, this figure illustrates the difficulties in making a consequential loss claim. There is a real need for victims to obtain expert advice if they are considering making a claim.”

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