Marsden v Barclays Bank Plc

A broadly worded settlement agreement may release unknown claims where its language and context show that this was intended. The chronological order of related agreements does not prevent consideration from being valid where they formed one transaction. Lawful commercial pressure amounts to economic duress only in rare cases involving illegitimate pressure and a lack of practical choice. Regulatory breaches do not make interest-rate swap contracts void or unenforceable where the statutory regime provides civil remedies but preserves transactions. A regulatory review of past sales does not itself create contractual relations between the bank and review participant. Claims concerning the original swap sale were compromised; the remaining claims had no realistic prospect of success.

Mr Marsden sought damages and other relief concerning the alleged mis-selling of two interest-rate swaps by Barclays Bank Plc. He also alleged breach of contractual duties in the Bank’s later review of the swap sale. The Bank applied for summary judgment or strike-out, relying principally on a Settlement Agreement by which Mr Marsden released claims arising directly or indirectly from, or connected with, the swaps.

The issues were whether the Settlement Agreement lacked consideration, was procured by economic duress, or failed to cover fraud and unknown claims; whether regulatory breaches could render the swaps void; whether the review created contractual obligations; and whether the pleaded deceit and review claims were otherwise arguable.

1. Summary judgment. The Bank was entitled to summary judgment. The claim was dismissed.
2. Consideration. The facility agreement and Settlement Agreement were part of one overall transaction, structured as interdependent agreements. The Bank’s agreement to provide the new facility, and alternatively its forbearance from cancelling it before drawdown, provided consideration for the release. The order in which the agreements were executed was not decisive.
3. Economic duress. The relevant test required pressure producing compulsion or lack of practical choice, illegitimate pressure, and a significant causal influence on entry into the contract. In commercial contexts, lawful-act duress is rare. The Bank’s insistence on a release as part of restructuring a defaulting debtor’s liabilities, and its refusal to negotiate while the FOS complaint remained unresolved, were lawful bargaining positions and did not amount to illegitimate pressure.
4. Scope of release. Applying Bank of Credit and Commerce International SA (In Liquidation) v Ali (No 1) [2002] 1 AC 251 and related authority, construction remained the governing question. The Settlement Agreement was deliberately directed to the swaps and used sufficiently wide language to encompass existing, future, unknown and mis-selling claims, including deceit in the circumstances. The alleged regulatory or systematic nature of the misconduct did not alter that construction. Claims concerning a genuinely later contract for the review would fall outside the release, but no such contract existed.
5. Other causes of action. Regulatory failings did not make the private swap contracts void or illegal. The statutory regime supplied civil remedies and expressly provided that regulatory contraventions did not make transactions void or unenforceable. The deceit pleading was inadequately particularised and had no realistic prospect of success. The review was undertaken pursuant to regulatory obligations, without contractual intention or consideration. In any event, the Bank had acted diligently and had allowed generous extensions for consequential-loss claims.

First-instance decision. No prior appellate decision concerning this claim was stated in the judgment.