1. Art and Diseño

Consequential Loss Claims
Explaining
Consequential Loss Claims
All Square. All Fair.
January 2015
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This guide will help you identify if your mis-sold business banking financial product has the potential
for a Consequential Loss claim and how All Square would be able to provide the appropriate
expertise to manage your claim.
Our Values
About All Square
All Square are one of the UK’s leading firms for complex business bank mis-selling
claims, including:
Fixed Rate
Business Loans
We are focussed on
We are entirely results
the needs of our clients
driven for our clients
Tailored
Business Loans
We stand shoulder
to shoulder
with our clients
Interest Rate
Hedging Products
Foreign Exchange
Products
Our clients
are at
the core of
everything
we do
We share the risk
of winning with
our clients
We act professionally
and ethically at all times
All Square offers a full claims service for all our clients, which includes a comprehensive
Consequential Loss claims service for mis-sold business banking products. This means
that you don’t need to spend time sourcing a Forensic Accountant for your Consequential
Loss claim as we have our own in-house specialist to assist.
with our clients
Please call our specialists on
0113 323 1950
to discuss how we can help.
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Explaining Consequential Loss Claims
NO WIN
NO FEE!*
I have received your offer of
compensation, but I am confused
about Consequential Losses?
BA N K M A N A G E R
SHOP
What are Consequential Loss Claims?
Consequential Loss claims tend to form the second part of the
claim process that arises from the mis-sale of a financial product.
SM
ALL
B U SI N E S S O W
The first part of the claim relates to something called ‘basic redress’, which is redress or
compensation related directly to the mis-sold financial product. These are losses that
have arisen due to the payments made under the financial product itself. It is important
to get any basic redress offer checked by an expert to ensure that the bank is awarding
a full and fair amount of compensation.
The second part of the claim relates to Consequential Losses. A Consequential Loss
claim arises from more indirect losses that are materially caused by the mis-selling of
the financial product. These additional losses, or costs, can be suffered by an individual, partnership or a company and can potentially amount to significant sums of money.
Consequential Loss claims broadly fall into 3 categories; namely:
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1.
Lost Business Opportunities
These losses can flow from the loss of profits from forsaken investment
opportunities, curtailed capital expenditure in capital-intensive industries,
or consequential fire sales of property and stock at below market prices.
2.
Increased Business Costs
The impact of the financial product can create cash flow (liquidity) problems, which can be remedied with the use of short-term liquidity measures. Typical
tactics employed by businesses include customer incentive discounting and
debt factoring, which improve short-term cash flow to the detriment of
overall income.
3.
Additional Bank Charges, Fees and Penalties
This part of the Consequential Loss claim relates to additional bank charges
and fees that are materially caused by the payments made under the
mis-sold financial product. Examples could include overdraft charges,
valuation fees and referral penalties.
NE
R
Let me explain. As part of our
offer you can get an extra 8%
interest which covers any
Consequential Losses, so you
don’t need to claim for
Consequential Loss.
THE BANK
But this does not even cover my
losses. They were far greater
than 8%!
SHOP
Hold on! Before you sign
anything, we can assess your
Consequential Losses and see
if you could be entitled to more
than 8% extra.
SHOP
Sounds good.
But this all sounds quite complex!
Don’t worry. We are specialists in
the area of claims and have our
Forensic Accountant on hand to
help you.
But how much will this cost me?
SHOP
We provide a ‘No Win No Fee’*
service. You only pay us if we are
successful with your claim.
*Fee payable if case is not pursued at client’s request.
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All Square’s Consequential Loss Claims Process
Initial Call with
Forensic Accountant
Call Report or
‘Shopping List’
Identify if there is a potential
Consequential Loss claim.
• Summary of meeting
• Request for further information
& documentation
(20 minutes)
Describing the Report Process
1. First part of report
Scope, principles, counterparts and
components of claim.
2. Second part of report
Preliminary Consequential
Loss Claim Report
Instruction
Business formally
instructs All Square.
• Provides a probability on the
viability of the claim
Produces the ‘meat’ of the report
containing detailed financial forensics
including a full evaluation of the
businesses finances over the period
under review.
3. Final part of report
• Includes summary background,
details of legal tests and key
components of the claim.
Summarises and concludes the loss
and states the financial redress to be
paid.
4. Submission of report
Direction
Meeting
Full Report
& Submission
Meeting with Forensic
Accountant to finalise direction,
information requests and
delivery timeline.
Includes details of bound file
containing all the cross-referenced
contemporaneous
documentary evidence.
Report and supplementary files are
submitted by registered courier to the
Bank to initiate the claim and
subsequent negotiation.
Approximate Timeline
4 weeks
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Consequential Loss Case Study
The following case study is based on a real Consequential Loss (CL) claim currently being
undertaken by All Square.
Background:
Industry:
CL Claim:
Agriculture
£1.25 Million
Mis-sold Product: Interest Rate Collar
CL claim size:
£1.25 million
Expected Time:
12 Months
Our client has been running a successful business supplying agricultural produce for over
thirteen years. With a view to investing in the future, in 2006 our client approached his
bank of many years for a business mortgage of £1 million to purchase the land and
buildings that he was operating from.
Following a ‘bank-led’ negotiation, our client entered into a Base Rate Swap (Interest Rate
Hedging Product, IRHP) at 4.75%, meaning his total cost of lending was fixed at 6.00% for
10 years.
On 5th March 2009 the Bank of England reduced its base rate to 0.5% in a bid to support
the Government’s strategy of stimulating investment and hence economic growth. At this
stage our client was still locked into a fixed interest rate equal to 6.00%, and would have
continued to pay this rate until 2016 had the Financial Services Authority (from 1 April
2013 know as the Financial Conduct Authority) not imposed the IRHP Review process on
the Bank.
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During the course of 2010/11 our client identified an investment opportunity in renewable
energy that was being promoted by ofgem and the UK Government. A plan, business case
and numerous financial scenarios were developed, a project initiated and tenders sought
from four accredited suppliers. The required investment was £0.4 million, which would
generate £2.5 million in gross profit over a contractual period of 25 years.
Due to liquidity issues, the investment could not go ahead until mid 2014.
In August 2014 our client instructed All Square to pursue a Consequential Loss Claim on
his behalf.
All Square:
You may be aware that the current average amount of Consequential Loss claims that
have been paid in the FCA Review is only £7,530 per claim*.
We believe that one of the reasons for the low amounts paid on Consequential Loss
claims so far is due to the poor identification, formulation, presentation and negotiation
of these types of claims. We believe that this is very much a specialist area of claim which
requires the skills, experience and approach of a fully qualified Forensic Accountant.
The banks will typically give you 28 days in which to prepare and submit a Consequential
Loss claim. We believe this is entirely unreasonable to undertake the process properly. If
you are getting near your 28 day deadline, contact your bank and ask them for a further
extension of the deadline.
All Square take a professional approach to our Consequential Loss report process which
we believe is required to get the best results. If done properly, Consequential Loss claims
can potentially dwarf those claims relating to ‘basic redress’ as we have seen in this case.
Our clients should also be aware that the process of claiming Consequential Loss should
not be done with a ‘light-touch’ approach, but rather, will require their full engagement
and co-operation in order to stand the best chance of success. This is most definitely
one of those professional services that require a high element of ‘co-creation’ and a
like-minded professional approach.
*
Source: http://www.fca.org.uk/consumers/financial-services-products/banking/interest-rate-hedging-products/claims-for-consequential-loss
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Why use All Square?
What to do next
We believe there are four key reasons why you should consider appointing us to
manage your claim for Consequential Loss:
We hope this guide has provided you with some clear information regarding business
banking product Consequential Loss claims, and our forensic accounting techniques
employed to validate those claims.
1.
Experienced and Qualified Banking Forensic Accountant
We utilise the skills, knowledge and experience of a fully qualified banking Forensic Accountant.
We understand this can seem a complex and daunting process, so we are keen to keep
the claims process as simple as possible.
2.
Thorough and Diligent Claims Process
There is no interpretation, no subjectivity and all determinations are based solely on objective, verifiable and contemporaneous documentary evidence held on file. We let the facts speak for themselves.
We look to resolve your claim in the quickest possible time frame without
compromising on quality.
3.
Maximising the Amount of Redress
We aim to claim to the full amount of redress due to you.
We check that any offer of redress is a ‘full and fair’ amount.
4.
No Win No Fee*
We provide our Consequential Loss services on a No Win No Fee* basis with our clients. We are happy to share the risk of successfully resolving the claim with our clients, so we will only take your case on if we think you have a higher probability of securing redress.
We would be delighted to have an initial conversation with you to discuss your
circumstances. We will then be able to assess the strength of your claim, size of your
claim and determine a plan to progress your claim.
We are the specialists
Remember, we only deal with claims for mis-sold business banking products, including
Consequential Losses associated with these claims. That’s all we do, day in day out, so
we know how best to progress your claim.
We look forward to hearing from you.
CALL TODAY! 0113 323 1950
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*Fee payable if case is not pursued at client’s request.
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Consequential Loss Claims
Explaining
Consequential Loss Claims
0113 323 1950
[email protected]
www.allsquare.co.uk
Disclaimer
This document is designed to be informative but is not intended to constitute advice, whether legal, financial or
otherwise. We make no warranties or representations about any of the content (including, without limitation,
the quality, accuracy, completeness or fitness for any particular purpose of such content).
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All Square is a trading style of All Square Finance Limited. All Square Finance Limited is regulated by the Claims Management Regulator
in respect of regulated claims management activities, it’s registration is recorded on the website www.justice.gov.uk/claims-regulation
(Authorisation No. CRM31952). All Square Finance Limited is registered in England and Wales under Co. No. 08246245. Registered
office at Unit 1C, Riparian Way, The Crossings Business Park, Cross Hills, Keighley, BD20 7AA Telephone: +44 (0) 800 083 0286
Facsimile: +44 (0) 844 288 9629 VAT NO: 135536417.