A leading Fylde businessman embroiled in a long-running fight with a bank today told how he has been left facing a “nightmare” after losing a court battle.
Hotelier and Blackpool restaurateur Paul Rowley and estate agent John Green accused the Royal Bank of Scotland of mis-selling them an interest rate swap in 2005.
The pair had borrowed £1.5m to fund their projects and decided to take out an interest rate swap with the bank to protect themselves against interest rate fluctuations.
They initially “did well” out of the swap between June 2006 and October 2008 as interest rates steadily rose.
But amid the market convulsions following the Lehman Brothers collapse and plummeting interest rates, the pair were left seriously out of pocket.
Following the collapse the pair were told, in early 2009, by RBS it would cost them almost £140,000 to buy themselves out of the swap.
They claim the bank did not adequately warn them of the swap’s downside and the potential cost of getting out of it and have since fought their case through the courts.
But their claim was dismissed by the High Court last year and they have now tasted final defeat after Appeal Court judges also threw out the case this week.
Mr Rowley said: “We’ve been battling this since 2009 when we realised the protection didn’t work.
“It’s been an absolute nightmare, working every hour God sends just to raise money to pay the bank.
“It’s affecting everything from my family life to social life and business life and I’m lucky I have a very strong support network round me to help me through it.”
Lord Justice Tomlinson pointed out that the swap was “very straightforward” and that, as experienced and intelligent men, neither Mr Green, the founder of Lytham Estate Agents, nor Mr Rowley, who runs the Lindum Hotel, on South Promenade, St Annes, would have had difficulty understanding how it worked.
Jon Green, a senior associate acting on behalf of Mr Rowley and Mr Green, is now seeking permission to appeal to the Supreme Court after he labelled the Court of Appeal’s findings “perverse”.
He added: “It is difficult to understand how the court reached its decision that a bank undertaking a regulated activity which required compliance with the Financial Conduct Authority’s Conduct of Business rules is not subject to a statutory duty.
“Even more surprising is the conclusion of the court that a common law duty of care was not owed by the bank to Messrs Green and Rowley to ensure that it took reasonable care to ensure they understood the natures of the risks involved in entering into the swap transaction.”