On 24th April 2015 a landmark decision was made. Holmcroft Properties Limited was given permission to bring a Judicial Review against the redress scheme run by Barclays and reviewed by KPMG.
Barclays Bank (as an interested party, having mis-sold the derivatives), KPMG LLP (in their capacity as the Independent Reviewer or Skilled Person under s166 FSMA 2000) and the Financial Conduct Authority (an interested party and the Regulator) appeared at the hearing to respond to claims from Holmcroft that the compensation given to victims of mis-sold interest rate hedging products (IRHPs) has been unfair.
Holmcroft had been awarded around GBP 500,000 under the IRHP mis-selling compensation scheme, but were not compensated for alleged consequential and other losses. The decision could open the way for a full Judicial Review of the IRHP scheme and the role of the skilled person.
Mr Justice Parker stated that KPMG could potentially be considered to be exercising the role of a public body because KPMG as the Reviewer has a public law duty ‘woven into the fabric’ of its task by facilitating and enforcing its regulatory function and therefore KPMG could be the subject of a Judicial Review. It was also indicated that the Judicial Review claim was of general public interest.
Holmcroft now need to persuade the Court to make an Order quashing KPMG’s decision and obtain a declaration that it was wrong to exclude consequential and other losses from the compensation they were awarded. It is important to note that this Judicial Review, even if successful, does not mean all affected SMEs will automatically obtain any enhanced redress. Mr Justice Parker did not rule on the merits of each party’s arguments, but it is a significant step achieved by Holmcroft.
Any similarly affected SMEs should contact Anna Duffy immediately and certainly well within three months of the date of the final redress outcome letter (which is the time limit for seeking Judicial Review).