As part of the IRHP review, banks agreed to pay 8% annual simple interest (or identifiable cost that the customer incurred) on any redress payments to reflect lost opportunities. For most customers, given the economic context over the past years, this has represented a straightforward and fair alternative to putting together consequential loss claims.
If customers believe their 'lost opportunity' costs amount to more than the 8% simple interest, they are able to put together a claim for consequential loss. All customers are invited to do this following the basic redress offer.
The table below the banks' progress in relation to customers who have chosen to submit a bespoke consequential loss claim. We will publish quarterly updates.
|Progress of bespoke consequential loss claims|
|Number of customers who have submitted a bespoke claim||3,743|
|% Assessments complete||92%|
|Analysis of completed assessments of bespoke claims (amount payable over and above 8% a year)|
|No additional redress||1,683|
|£1 to £9,999||1,210|
|£10,000 to £99,999||500|
|£100,000 to £999,999||45|
|Consequential losses payable|
|8% a year added to every offer||£457m|
|Additional losses payable over and above 8% a year||£40m|
|Total consequential losses payable inclusive of 8% a year||£497m|
All customers who receive a basic redress offer have the opportunity to make a claim for consequential loss, and some claims have already been submitted. Customers are initially given around 4-6 weeks to prepare and submit a claim. To facilitate this, banks are offering support for customers, for example, by providing guidance to help customers put their claims together.
Banks are also being pragmatic and customer-centric when customers ask for more time to put together their claims and will consider reasonable requests for extensions on a case by case basis.
Banks aim to assess most claims in around 4-8 weeks. Some more complex claims could take longer. All claims are being assessed by independent reviewers. If claims are rejected, banks are providing constructive feedback so that, where appropriate customers may be able to provide additional information to support their claims.
The banks have agreed to consider consequential loss on the basis of established legal principles in relation to claims in tort and for breach of statutory duty. Customers should be aware of these legal tests and principles, which we have summarised and supplemented with examples.
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