Plymouth couple get court date for five-week battle against big bank that could win them £33millionPosted: October 09, 2015|
A Plymouth businessman and his wife are preparing for a High Court battle with a big bank that could earn them more than £33million compensation.
Michael and Diane Hockin have been given a court date for a five-week hearing when they will sue the Royal Bank of Scotland (RBS) for allegedly misselling them a complicated interest rate swap.
The couple allege they were forced to take the financial product they didn’t understand, didn’t need and didn’t want in 2008.
Four years later their thriving property business, was put into administration.
They and their lawyers will take on bankers from the UK-taxpayer in January 2017.
Their case could open the way for many more claims to be settled.
Michael said: “The bank has been dragging this out for so long in the hope that we would run out of money to fight them and just go away.
“That is what has happened to many others businesses. Well, we’re not going away.”
He added: “We had the money, we had Diane’s brilliant memory for all that had gone on and we had our lawyers at Bergs.
“Without all of that we wouldn’t have been able to keep on fighting.”
Thousands of other businessmen and woman across the country who claim to have been driven into administration through the misselling of interest rate swaps have had to give up.
Many who have lost everything are looking to the Hockins’ court case and others that are pending.
By the time the court hearing starts it will be five years since RBS and its company, Global Restructuring Group, put the Hockins’ 25 business parks across Plymouth and the South West into administration.
Their main businesses in Plymouth were Faraday Mill, Sugar Mill and Christian Mill.
At the time the Plymouth-based company, London and Westcountry Estates Ltd, was profitable and well-run, making around £50,000 a month and providing business premises across the region for up to 400 businesses employing some 1,500 people.
But, it is alleged, the bank triggered a massive rise in interest rates in the hedging product they had been sold to engineer what the Hockins’ say was a deliberate move to bankrupt their business and take control.
The administrators moved in and the Hockins lost the company they had spent most of their working lives creating.
That came after the Hockins’ previous loan with RBS was converted into a new Bermuda interest rate swap – a financial arrangement that was supposed to protect borrowers from interest rate hikes.
That loan was sold in January 2012 – with a 33% discount – to Isobel Assetco Ltd, an asset management company, 75% owned by the bank and 65%funded by RBS.
The case features in the latest banking report from their solicitors Berg. An extract reads: “Despite London and Westcountry Estates Limited being a growing and robust business, the bank used the increased costs under the swap and the alleged breaches in loan to value covenant, to put the company into the hands of the notorious Global Restructuring Group.
“Then in January 2012 the bank sold the business loan at 33% discount to Isobel, a fund partly owned by RBS (75%). Two months later Isobel put the company into administration and at that point Mr and Mrs Hockin lost control of the business.”
The crucial breakthrough in the Hockins fight for justice came in March last year when they won a 15-month High Court battle to be allowed to pursue their case against the bank.
Ernst Young, the administrators controlling what had been the family’s business, refused to assign the claim to anybody, including Mr and Mrs Hockin.
But a judge ruled in Michael and Diane’s favour, opening the way for them to pursue the bank for compensation.
Their solicitor who helped them win that crucial battle and is now preparing their case against the bank is Alison Loveday, managing partner with Manchester-based Berg.
She said: “The Hockins have been advised that their claim is worth in excess of £30 million but as might be expected the bank are seeking to thwart the claim at every stage. Tax payers’ money is thus being used to defend this claim vigorously, when in reality the bank should accept its wrongdoing and compensate the Hockins for the loss and damage they have suffered as a result of the bank’s actions.”
Two cases are due in court next year, before the Hockins’ hearing, which could establish a precedent. And the Financial Conduct Authority’s long-delayed investigation into the activities of the Global Restructuring Group is also due out by the end of this year – having already been delayed a number of times.
The bank is sticking to denials that its Global Restructuring Group did anything wrong or that there is a compensation scheme in the offing. “We have no plans for any redress scheme in relation to this matter,” Jon Pain, RBS’ Chief Conduct and Regulatory Officer told news agency Reuters.
Michael and Diane Hockin, who live at Holbeton, near Plymouth, are not getting their hopes up for an early settlement and are prepared to go all the way to court in 18 months’ time.
They are also adamant that the size of the payment – in excess of £30m – should reflect their losses, the damage done to their reputation and allow them to put the business back where it was before all of this happened.
The stress has taken its toll on Diane’s health – she was diagnosed with breast cancer in 2013 – and the couple have found their credit rating badly damaged as a result of the loss of their business.
“We were triple A rated and now our credit is destroyed,” said Michael. “All this could have been settled a long time ago but I am prepared to go all the way. I am going after these guys. They knew what they were doing and they should have to pay for that.”
RBS declined to comment.