CGL: unexpected, illogical and unfair
3 / 1 / 2018
David McIlroy and Nathan Webb consider the recent Court of Appeal decision in CGL v RBS  EWCA Civ 1073, which addressed the scope for small businesses bringing claims against banks for alleged mis-selling in breach of regulatory rules.
The decision involved three conjoined appeals and in each case the claimant alleged that it had been sold an interest rate hedging product in breach of the provisions in the FCA Handbook. The appellants had submitted claims to the redress scheme and contended that the banks in question had not dealt with their claims fairly and had not applied the rules which had been agreed with the FCA when the scheme was set up.
In considering whether banks owed companies a common law duty of care which paralleled the regulatory rules, Beatson LJ (giving the sole judgment of the Court) relied upon the previous decision in Green & Rowley v RBS  EWCA Civ 1197 and held that there was no duty of care in relation to the redress scheme.
The article explores Beatson LJ’s judgment and why, in the authors’ view, it was unexpected, illogical and unfair.
The article was originally published in the October 2017 edition of the Butterworths Journal of International Banking and Finance Law at page 548 and is reproduced here with permission and thanks.