The High Court dismissed a judicial review application yesterday over auditor KPMG’s role in compensating a nursing home company mis-sold interest rate products by Barclays bank.
Holmcroft Properties claimed that Barclays made them an inadequate offer of compensation, in a case which could have opened the floodgates for others unhappy with banks’ compensation offers.
Holmcroft questioned auditor KPMG’s role as an independent reviewer in the compensation process and, in June 2012, the Financial Services Authority announced it had found serious failings in the sale of interest rate swap products, following which nine banking groups were urged to conduct a review.
Under instruction from the Financial Conduct Authority, Barclays agreed to set up a scheme to provide recompense to customers who had been wrongly sold these products – with KPMG overseeing the scheme.
In April last year a judge granted a judicial review application, which was quickly overturned.
Yesterday, High Court Judges ruled in favour of KPMG, claiming the company had no public law duty and threw out the application.
The High Court judgement stated: “There is clear evidence that KPMG did carry out the task which they were required to do pursuant to the undertaking.
“Each of the September letters to Holmcroft stated in terms that KPMG had considered and confirmed the offer of redress.
“KPMG also expressly reviewed the offer again following the further letter from Holmcroft dated 19 September.
“There is no basis for saying that they were in breach of any public law duty, even assuming that they were subject to such duties.”
Holmcroft’s defence said that the judgement offered “very credible grounds for appeal” and indicated that “there is value in pursuing an alternative legal route to securing compensation for affected businesses, focusing on the issue of breach of duty”.
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