Marshall v Barclays Bank Plc

At an interlocutory stage, claims should proceed if reasonably arguable. The court must avoid a mini-trial, but should strike out or refuse an amendment where the claim has no real prospect of success. A broadly drafted settlement release may cover known, unknown, present and future claims where its language and factual context show that intention. A party who knew of a potential claim could not avoid the release merely because the precise legal basis or the seriousness of the alleged misconduct was not known. Regulatory breaches do not ordinarily make an underlying transaction void for illegality or public policy. Under the Financial Services Act 2012, a regulatory contravention does not make a transaction void or unenforceable. Serious allegations must also be pleaded with sufficient clarity and particularity.

The claimant alleged that the defendant had mis-sold an interest rate swap and sought to maintain existing claims and add claims based on misrepresentation, breach of duty, regulatory breaches, deceit, public policy, unjust enrichment and defects in a later review process.

The defendant applied to strike out the claim or obtain summary judgment, relying on a general release in a 2012 Settlement Agreement. The claimant applied to amend the particulars of claim. The central issues were whether the release covered the existing and proposed claims, whether alleged non-disclosure or public policy considerations could defeat it, and whether the proposed claims were reasonably arguable and adequately pleaded.

1. Interlocutory test. The court had to assess the merits of the existing and proposed claims without conducting a mini-trial. Properly arguable claims should not be struck out, but the court should act where a claim had no real prospect of success.
2. Construction of the release. The Settlement Agreement released claims connected with the banking relationship and the relevant matter, including direct or indirect, foreseen or unforeseen, present or future claims. On the objective construction of the clause, it covered all claims advanced or proposed. The claimant knew before settlement that he had a potential mis-selling claim. Lack of knowledge of the precise legal mechanism or the full extent of the alleged misconduct did not prevent the release from operating.
3. Sharp practice and review. The claimant’s reliance on the principle identified in Bank of Credit and Commerce International SA v Ali was rejected. The review did not materially add to the right to complain or litigate that the claimant already knew about. In any event, the review had occurred and the Bank had not prevented participation in it. Any non-disclosure could not discharge the Settlement Agreement or abrogate the release.
4. Public policy and regulatory breaches. Even assuming widespread and deliberate regulatory breaches, they did not make the swap void for illegality or public policy. Such breaches could support civil remedies where the statutory framework allowed them, but could not invalidate the transaction merely because they were serious. Section 138E(2) of the Financial Services Act 2012 reinforced that conclusion by providing that a regulatory contravention did not make a transaction void or unenforceable.
5. Pleading and amendment. The proposed public policy claim was insufficiently clear and particularised because it listed regulations without identifying the actual breaches and their individual or cumulative effect. The deceit claim lacked particulars of the alleged false statements and the Bank’s knowledge or recklessness. The review process was not contractual between the parties and no consideration supported contractual relations. The possible effect of DISP was left undecided.
6. The existing claim was struck out, summary judgment was entered for the Bank, and permission to amend was refused. The claimant was ordered to pay the defendant’s costs, subject to detailed assessment, with an interim payment of £20,000.

This was a first-instance decision. Permission to appeal was refused because the judge considered that there was no real prospect of success. The claimant could apply to the Court of Appeal for permission to appeal against the interlocutory decision.