Bartels & Anor v Barclays Bank Plc

Claims arising from a financial product purchased by a company belong to the company. Directors and shareholders who dealt with the bank as the company’s representatives do not thereby acquire personal duties of care or causes of action for the company’s loss.

Conducting a review or negotiating redress does not ordinarily amount to a clear representation that limitation will not be relied on. For joinder after limitation has expired, CPR 19.5 requires the claim to have been current when proceedings began and the new party to be necessary to continuation of the original claim. A claimant cannot use joinder to introduce its own separate claim or to circumvent an issue fee. Mandatory insolvency set-off remains applicable to redress payable to an insolvent company.

The claimants were former directors and shareholders of Gwenllian Court Hotel Limited. The company had borrowed from the defendant bank and entered into an interest rate swap. After the company entered administration and was dissolved, the bank accepted that the swap had been mis-sold and offered redress under a review process.

The claimants issued proceedings personally, alleging breach of statutory duty, misrepresentation, negligence and mishandling of the review. They later sought to add the restored company as a claimant after the limitation periods had expired. The bank applied to strike out or obtain summary judgment, while the claimants applied to amend and join the company. The central issues were standing, limitation, waiver or estoppel, the requirements of CPR 19.5, and whether any viable duty arose from the review.

1. Existing personal claims. The breach of statutory duty and misrepresentation claims could only be brought by the company, which purchased the swap and was the contracting party. The claimants’ negligence claim also failed. Their status as shareholders, the use of the hotel as a family home, and their dealings with the bank as company representatives did not create a personal duty of care.
2. Waiver and estoppel. A review, complaint handling or settlement negotiation did not amount to a clear and unequivocal representation that limitation would not be relied on. There was also insufficient evidence of reliance. The waiver argument therefore had no real prospect of success.
3. Joinder. Under CPR 19.5, the company was not necessary to continuation of the claim issued by the claimants. The original pleading asserted personal causes of action and personal losses, rather than a representative claim for the company. The authorities concerning substitution of a company, liquidator or joint claimant were distinguishable.
4. Discretion and abuse. Even if necessity had been established, permission would have been refused. Issuing personally to obtain fee remission and then seeking to add the company after issue was an abuse of process designed to avoid the substantial issue fee.
5. Section 14A. The judge considered that there was, just, a real prospect that the claimants had acquired sufficient knowledge for the extended negligence limitation period only in June 2012. That conclusion was academic because joinder failed under CPR 19.5.
6. Review claims. The company had no real prospect of proving breach. The review could not displace mandatory insolvency set-off, the 40-day consequential-loss process was reasonable, and the bank was not required to hold multiple meetings or grant an open-ended extension. No separate duty arose from an internal investigation or informal dispute-resolution process. The later letter could not accept an offer of consequential-loss redress that had already closed.
7. The existing claims were struck out. Permission to add the company and pursue the proposed claims was refused.