IRHP: claims for consequential loss

In June 2019 the FCA Board commissioned an Independent Review of the FSA, and subsequently the FCA’s, supervisory intervention on Interest Rate Hedging Products. On 14 December 2021 we published the Independent Reviewer’s report and the FCA’s response to its recommendations.

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.

Our final progress update shows that the banks have 72 consequential loss claims left to assess.  These are expected to be completed in the coming weeks.

  September 2016
Progress of bespoke consequential loss claims
Number of customers who have submitted a bespoke claim 3,814
Assessments complete 3,742
% Assessments complete 98%
Analysis of completed assessments of bespoke claims (amount payable over and above 8% a year)
No additional redress 1,795
£1 to £9,999 1,296
£10,000 to £99,999 593
£100,000 to £999,999 52
£1,000,000 + 6
Consequential losses payable
8% a year added to every offer £463m
Additional losses payable over and above 8% a year £46m
Total consequential losses payable inclusive of 8% a year £509m

How claims are assessed

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.