Mr and Mrs Hockin had built up a successful family company called London and West Country Estates which owned and ran a number of business parks. This was their life’s work, which was taken from them as a result of the actions of RBS.
The Hockins were mis-sold a complex interest rate hedging product which they did not want or understand. The Hockins were also unaware that the bank could flip from LIBOR to base rate if it suited them partway through the term. They were told that they could exit the swap without charge, which was untrue as the exit charge within a few months would already have been several million pounds and around the time the facility was coming to an end in 2011, it had reached over £10 million. The bank also failed to mention that the swap would be taken into account when assessing the company’s loan to value covenant.
But far worse was to come. Despite London and West Country Estates being a growing and robust business, the bank used the increased costs under the swap, and the alleged breaches in loan to value covenant, to put the company into the hands of its notorious Global Restructuring Group.
Then, in January 2012, the bank sold the business loan at a 30% discount to Isobel, a fund partly owned by RBS (75%). Two months later, Isobel put the company into administration and at this point, Mr and Mrs Hockin lost control of the business. Although they wanted to pursue a claim against RBS in relation to the sale of the swap, they could not do so as ownership or conduct of the claim sat with the administrators, Ernst & Young. The administrators refused to pursue the mis-selling claim against the bank, nor would they assign the claim to the Hockins to enable them to do so.
With our help, the Hockins won a Court application ordering the administrator to assign the claim. Claim proceedings then commenced against the bank. The Hockins were advised that their claim was worth in excess of £30 million but as might be expected the bank sought to thwart the claim at every stage. Tax payers money was thus used to defend this claim vigorously, when in reality the bank should have accept its wrongdoing and compensate the Hockins for the loss and damage they suffered as a result of the bank’s actions.
The claim against the Bank progressed to Trial which commenced on 28th April 2017. On the third day of the scheduled five week trial RBS reached a settlement with the Hockins.
For more information on this case please read our related blogs and press.