Our forensic financial experts have experience of unravelling the details and identifying losses arising from the mis-selling of financial products by the banks e.g. derivatives and hedging products. In complex cases we have provided a valuable service in assessing whether a loss has arisen, the amount of loss and interest on losses.
During the period in which mis-selling claims were active, we were asked to assess the strength of potential claims for consequential losses.
We prepared accurate, structured, strongly evidenced and well argued consequential loss claims. This enabled our clients' claims to be in a stronger position when presented to the the banking community.
Our experts were instructed by the Claimant, a construction company, which had been mis-sold two interest rate collars and had paid a substantial amount of interest costs when LIBOR dropped below the set level.
The bank agreed liability for the mis-selling and agreed to compensate the Claimant for premiums paid and interest incurred. Our team initially confirmed that the bank’s calculations were accurate.
At the time that the financial products were issued, the Claimant had agreed to acquire a piece of land on which it had an option to build three warehouses. Planning permission was granted, a buyer for two of the warehouses and tenants for the third had been arranged and all that was outstanding was to obtain finance for the development, supported with a deposit.
However, the Claimant’s cash reserves were low as it had paid substantial amounts on the collar. The required deposit could not be made and high street bank funding was rejected. As the project was expected to be profitable, the Claimant was determined to progress and obtained finance from an alternative lender, resulting in the Claimant paying increased interest rates at 18% p.a. and giving away 20% of project ownership to the lender.
Our team was requested to advise on the strength of the claim for consequential loss, and subsequently to calculate that loss. Through a detailed review of the Claimant’s finances and the collar payments, the team was able to establish a link between the mis-selling and the lack of finance available for the project.
We prepared a detailed report to the bank in support of the claim for consequential loss.
In this case our team was instructed by the Claimant, a high end motor vehicle dealer, which had been mis-sold two interest rate collars, to assess whether there was a strong enough link between the financial consequences of the mis-selling and the relatively poor sales performance of the business.
The Claimant’s finances were reviewed over a period of time to establish that (i) the mis-selling had deprived the business of working capital, and that (ii) historically, when the business had been provided with cash boosts, the business had quickly converted the cash into stock, and had sold that stock for profit.
We were therefore able to confirm that there was a link between the financial consequences of the mis-selling and the relatively poor sales performance of the business.
We subsequently quantified the loss to the business caused by the mis-selling.
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