Family wins right to sue RBS over their lost firm
A Plymouth family have won a landmark case giving them the green light to sue Royal Bank of Scotland for millions over the alleged mis-selling of interest rate swaps that ultimately left them with crippling borrowing costs on a £55m loan.
Michael and Diane Hockin saw the property empire they had built up over 30 years snatched out of their hands when the bank's Global Restructuring Group (GRG) put it into administration in 2012. Since then their London and Westcountry Estates – which converted redundant factories into premises for more than 300 small business clients – has been sold off bit by bit by the administrator, Ernst & Young.
Legal claims by companies in administration are often taken up by the administrators, but in this case EY opted not to push ahead and vigorously contested signing the rights to sue RBS to the Hockins, even though Mrs Hockin remains a creditor. But a court has now ruled she should be allowed to press ahead.
Mr Hockin told The Independent that the family's battle against the administrators and the bank had been a "horrendous" ordeal. "It's been two years and they've fought us every inch of the way. I'm pleased with the result but we're only halfway there.
"We are now lodging a claim against the swap and we'll be looking at the administration, which we believe was flawed."
He claimed the bank was "out of control" but added: "We have had the facilities and the tenacity to fight them."
While smaller business mis-sold swaps can sign up to a review under the auspices of the Financial Conduct Authority (FCA), those deemed to be too big have to fight on alone. Mr Hockin believes many businesses have been left hanging as a result. "How can you fight people like EY and RBS?"
The GRG's activities are currently under the scrutiny of the FCA after the government adviser Lawrence Tomlinson published a report alleging that it had tipped viable businesses into bankruptcy.
In his ruling, Nicholas le Poidevin, QC, said Mrs Hockin should be assigned the claim even though the largest beneficiary of an outcome against RBS would be a firm called Isobel, which is 75 per cent owned by RBS and 25 per cent by the private equity giant Blackstone. Isobel holds London and Westcountry's debt.
The judge wrote archly that the banks would "undoubtedly prefer the claims to be abandoned" but that it would be in Isobel's interests to proceed.
Alice Loveday, a managing partner at Berg, the law firm that represented the Hockins, said: "They have lost the business they took 30 years building up. It was making £1m when put into admin. We felt it was a very good claim."
EY said in a statement: "Further to the hearing held on 12 March 2014 and judgment handed down on 19 March 2014, the administrators respectfully acknowledge the order and will act in accordance with the court's judgment."
An RBS spokesperson said: "The Hockins have previously raised issues concerning their swap transactions, which the bank has investigated and responded to in full. We have not found any evidence of wrongdoing by the bank."
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