From 2001 to 2012, UK banks engaged in interest rate swap mis selling and missold interest rate hedging products (IRHP) to thousands of customers. Failing to fully explain the potential risks – and in some instances using complicated terminology on purpose – they advertised these profitable packages as protective measures against any increase in interest rates.

For many businesses, disaster followed: their fortunes were decimated, and livelihoods were destroyed.

Why victims of interest rate swap mis selling don’t sue banks

If you were affected by interest rate swap mis selling, it is easy to feel like you have no realistic means of seeking legal redress. Banks have obvious financial and political clout. When they make catastrophic errors of judgment they receive generous bailouts; when they engage in dubious legal practices they frequently go unpunished.

As a victim of IRHP misselling, you have likely already suffered significant losses. Banking litigation has a reputation for being expensive, and it is not unfounded: paying a solicitor on an hourly basis can see costs quickly escalate. Even “no win, no fee” arrangements fail to consider costs such as expert testimony and ever-rising court fees. Banks have deep pockets, and are happy to play a protracted waiting game if it means they might keep their ill-gotten gains.

Interest rate swap mis selling

If you’re a small business owner, the urge to retreat and lick your wounds – even if you have a legitimate interest rate swap mis selling case – is understandable, but not advisable. The banks are counting on you doing so: your chance of success is greater than you think.

Third-party banking litigation funding is available for those who have been sold IRHP products under false pretences. It offers the potential to rebalance the scales of justice and ensure that your case is decided on its merits – rather than financial muscle.

The benefits of litigation funding

A litigation funder will assume all of the upfront costs associated with pursuing interest rate swap mis selling legal action in exchange for a predetermined portion of any damages awarded. Alternatively, if you are willing to assume some of this financial burden, this portion will typically be lower.

By using a conditional fee agreement (CFA), you can also minimise any pay-out to the financier in the event of an early settlement.

It also provides a welcome confidence boost to claimants facing much larger opponents: with their vast resources, banks have a psychological and monetary edge on businesses and individual litigants. With funding, the odds are tipped in favour of the victim: banks have admitted to engaging in misselling, and FCA reviews have compelled them to pay over £2 billion in compensation to over 13,000 customers.

Annecto Legal has access to a network of legal specialists, and considerable experience of funding IRHP misselling claims. To find out, more, visit our banking litigation page, or contact one of our financial services litigation advisors today.