The first of these is the pending appeal in the Green-v-Royal Bank of Scotland case which is due to be heard by the Court of Appeal in late July 2013.

Green-v-RBS [2012] EWHC 3661 (QB).

The factual matrix in the Green case is not dismilar to other claims in the sense that it relates to the purported mis-selling of an interest rate hedging product to a pair of small business owners by the Royal Bank of Scotland (“RBS”).

The kernel of Paul Rowley and John Green’s claims was that they were mis-sold an interest rate swap some 8 years previously.

The particulars of claim centred on 2 main causes of action against RBS (i) the information claim and (ii) the advice claim.

The information claim alleged that RBS was guilty of negligent mis-statement at or before a meeting on 19th May 2005 when the swap was arranged.

The advice claim was that RBS went further than purely giving information about the swap and the claimants pleaded that RBS actually advised them to enter into the product.

The latter argument (i.e. regarding the giving of advice) meant a duty of care would come into existence. In essence RBS was alleged to be in breach of their purported duty because the swap product was not suitable for the claimants.

The dispute was heard at the Manchester District Registry of the High Court of Justice in 2012, when His Honour Judge Waksman QC (sitting as a Judge of the High Court) held that the defendant bank was not in breach and dismissed the claims. This outcome would no doubt have been celebrated by the Champagne cork popping banking community and insurers alike but there are cases  that we have seen which have been difficult to defend particularly where the lender’s paperwork and contemporaneous documentary evidence of discussions alleged to have taken place, will not be as comprehensive as in the Green case.

Reading His Honour Judge Wakeman QC’s transcript, it’s fairly clear that an influential factor was the documentary evidence adduced by RBS.

Any defence lawyer worth his or her salt when instructed by a class of defendants such as banks facing these sorts of claims, would certainly make sure that the strongest case was fought first.

Some commentators have however pointed out that it’s important  to look at the facts of the Green case against the backdrop of what was occurring with the regulatory framework at the time.

In 2012, the old FSA (now the Financial Conduct Authority) carried out a wide-ranging review finding serious failings in the sale of interest rate swap products to small and medium-sized enterprises (SMEs). The report, published on 31st January 2013, followed the FSA’s review of a sample of 173 sales of IRHPs to “non-sophisticated-customers” from across 8 banks.

As we have reported previously the FSA found more than 90% of these sales did not comply with one or more of its conditions.

Its report was amended 2 months later in March 2013 and sets out parameters for a full review of the mis-selling of these products.

Some 9 banks (Allied Irish Bank (UK), Bank of Ireland, Barclays, Clydesdale and Yorkshire, Co-operative Bank, HSBC, Lloyds TSB, RBS and Santander) have all agreed to conduct their own internal reviews in line with these guidelines. The reviews will focus on the sale of these types of mortgages to ‘non-sophisticated customers’.

One very important aspect concerns the assessment of whats known as “consequential losses”, which can form part of the damages recovery as this will be assessed using “an established legal approach” to determine the measure of damage, including the usual causation/foreseeability requirements which was no doubt well received by the bankers.

The scale and labour-intensive nature of the FCA-driven review will inevitably be expensive.

The FCA has estimated more than 40,000 products have been sold by financial institutions to SMEs in the 10-year period covered by the review.

Some say the figure could be much higher.