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Chartered Accountants

Forensic Accountants

Corporate Finance Advisers

Birchfields, Blake House, 18 Blake Street, York, YO1 8QG

Birchfields, 15 Queen Square, Leeds, LS2 8AJ

Birchfields, Birchfields Chartered Accountants, Birchfields Forensic Accountants and Birchfields Corporate Finance are trading styles of Birchfields Accountants Limited, company no. 10355693, registered in England and Wales.

​Case Study - Loss arising from the mis-selling of financial products

In this case our team was instructed by the Claimant, a high end motor vehicle dealer, which had been mis-sold two interest rate collars, to assess whether there was a strong enough link between the financial consequences of the mis-selling and the relatively poor sales performance of the business.

The Claimant’s finances were reviewed over a period of time to establish that (i) the mis-selling had deprived the business of working capital, and that (ii) historically, when the business had been provided with cash boosts, the business had quickly converted the cash into stock, and had sold that stock for profit.

Case Study - Loss arising from the mis-selling of financial products

Our experts were instructed by the Claimant, a construction company, which had been mis-sold two interest rate collars, and had paid a substantial amount of interest costs when LIBOR dropped below the set level.

The bank agreed liability for the mis-selling and agreed to compensate the Claimant for premiums paid and interest incurred. Our team initially confirmed that the bank’s calculations were accurate.

At the time that the financial products were issued, the Claimant had agreed to acquire a piece of land on which it had an option to build three warehouses. Planning permission was granted, a buyer for two of the warehouses and tenants for the third had been arranged and all that was outstanding was to obtain finance for the development, supported with a deposit.

However, the Claimant’s cash reserves were low as it had paid substantial amounts on the collar. The required deposit could not be made and high street bank funding was rejected. As the project was expected to be profitable, the Claimant was determined to progress and obtained finance from an alternative lender, resulting in the Claimant paying increased interest rates at 18% p.a. and giving away 20% of project ownership to the lender.

Our team was requested to advise on the strength of the claim for consequential loss, and subsequently to calculate that loss. Through a detailed review of the Claimant’s finances and the collar payments, the team was able to establish a link between the mis-selling and the lack of finance available for the project. A detailed report to the bank in support of the claim for consequential loss was prepared.

Birchfields Chartered Accountants: Bank Mis-selling

Our forensic financial experts can help you unravel and identify your losses arising from the mis-selling of financial products by the banks e.g. derivatives and hedging products. In complex cases we provide a valuable service in assessing whether a loss has arisen, the amount of loss and interest on losses.

We can also assess the strength of potential claims for consequential losses. The bank review teams take more notice of an accurately structured, strongly evidenced and well argued consequential loss claim prepared by forensic professionals. It puts your claim in a stronger position.