Couple fight off bank attempt to block big compensation claim
A businessman and his wife have a fought off a bank's bid to block key elements of their multi-million pound compensation claim over the alleged mis-selling of a complicated interest rate swap.
Michael and Diane Hockin say they lost their Plymouth-based property business after they were forced to take on a financial product they did not understand and involved manipulation of interest rates.
The couple's lawyers say their claim against the Royal Bank of Scotland exposes "an iceberg" of similar cases related to Libor, the controversial London inter-bank lending rate. The full hearing is due to take place next January.
But taxpay er-owned bank RBS and National Westminster Bank made an interim application at London's High Court for key parts of the claim, which could be worth more than £33 million, involving the Libor issue to be struck out.
Refusing the application, Chancery Division judge Mrs Justice Asplin declared there were no reasonable grounds for the court to intervene.
The judge described how the Hockins had owned London & West Country Estates (LWE) which controlled a number of commercial business parks in Somerset and Devon.
In 2008 RSB extended a £55 million loan facility to LWE repayable over three years, with interest referable to Libor. The 10-year interest rate swap arrangement was also agreed as a hedge of some description had been a pre-condition of the loan.
Around October 2009 LWE was placed into the bank's Global Restructuring Group (GRG). It was then assigned to a joint venture company called "Isobel" at a significant discount. Isobel later put LWE into administration.
Mr and Mrs Hockin say LWE was forced into administration by Isobel, causing them substantial loss and damage.
They are seeking compensation alleging the swap was "induced by misrepresentations" made to LWE, and both the bank and GRG breached an implied duty to act in good faith.
The bank denies all allegations, including claims that it made untrue representations to LWE with regard to Libor.
The judge said the bank admitted that it was involved in Libor misconduct in relation to the Swiss franc and Japanese yen but not the British pound.
The strike-out application related to the allegations by the Hockins against GRG and Libor.
Refusing the application, Mrs Justice Asplin declared Mr and Mrs Hockin had a valid claim against GRG. She ruled there was no abuse of process and no reasonable grounds for striking it out.
Alison Loveday, chief executive of solicitors firm Berg, which represented the Hockins, welcomed the decision and said it has "wider connotations for other legal claims against RBS".
Ms Loveday said: "RBS proudly announced last week it had appointed a firm to improve its image to become 'the most trusted bank by 2020'.
"One has to question how spending taxpayers' money on attempting to limit the flow of information with regard to GRG and Libor, helps those aims.
"I believe the reason the bank went to such measures is that it knows the true size of the iceberg underneath this case.
"As many businesses are finding it hard to counteract the might and cost of the taxpayer-funded RBS legal machine, the Hockin case takes on greater significance than ever."