Jurisdiction(s):
United Kingdom

High Court of England and Wales upholds FCA’s refusal to expand IRHP mis-selling redress; APPG judicial review dismissed

Published on: 10 March 2025

Published by a Law360 reporter

Legal News

Article summary

The High Court held that the FCA acted reasonably in partly dismissing a 2021 review that criticised the watchdog for setting too narrow a scope for compensating customers mis-sold interest rate-hedging products (IRHPs) from 2001 onwards. Judge Clive Freedman noted that, by 2021, the considerable passage of time made establishing wrongdoing particularly challenging, and that mounting any action would have demanded substantial expenditure with no assured result. The court observed that widening any compensation scheme carried inherent uncertainty, not only because of litigation hazards, but also due to the difficulty of assessing prospects of success until extensive preparatory work had been undertaken. The judgment also emphasised the competing need to deploy resources towards more immediate and less historic mis-selling harms. In that context, the court accepted that although the review had condemned the regulator’s limited redress, the FCA’s partial rejection was rational. Freedman added that, a decade or two after IRHP sales, it is hard to envisage what would be required to reopen the question of the extent to which excluded customers were in fact mis-sold...

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