By Maeve Rowan
The High Court has refused an attempt by Bank of Scotland Plc and Lloyds Bank Plc to have limitation and redress-scheme issues decided in advance of the full trial of a claim brought by Vico Properties Ltd.
Vico, a property company, received loan facilities from Bank of Scotland Ireland between 2003 and 2008. In June 2008, a further loan required it to hedge half of its debt for three years through an interest-rate swap, a derivative whose payments depend on movements in a benchmark interest rate.
In 2012, the UK Financial Services Authority established a redress scheme for certain customers affected by mis-selling of derivative products. Lloyds initially told Vico that it was potentially within the review, but later said the swap had been sold by Bank of Scotland Ireland and was therefore outside the scheme because that entity was regulated in Ireland rather than by the UK authority.
Vico's proceedings allege breach of contract, negligence and negligent misstatement or misrepresentation. It also claims that reliance on the November 2012 letter deprived it of an opportunity to pursue mis-selling proceedings in the UK. The defendants deny liability and contend, among other things, that the claims are time-barred and that Vico would in any event have been excluded from the redress process as a sophisticated customer.
The banks asked the High Court to decide those two issues first, before the remainder of the case.
Ms Justice Marguerite Bolger refused. She held that both proposed issues involved questions of English law, which Irish courts treat as questions of fact proved through expert evidence. The parties had not agreed that factual foundation.
Vico also intends to plead fraudulent concealment under section 71 of the Statute of Limitations 1957, potentially creating further factual disputes. In addition, some pleaded claims would remain even if the banks succeeded on both preliminary issues.
The judge therefore directed that all matters proceed together at a single trial. Her preliminary view was that Vico should receive the costs of successfully resisting the application.