CGL Group Ltd v Royal Bank of Scotland

For limitation purposes, a claimant need not know that conduct amounted to negligence. It must know the material facts of the damage and, in broad terms, the facts constituting the essence of the complaint, including causal attribution. Suspicion is insufficient, but reasonable belief is enough to justify taking advice. A claim may be summarily determined where the relevant facts are undisputed and the limitation issue is legal. A bank conducting a regulatory redress review does not thereby assume a common-law duty of care to customers where the review agreement expressly excludes enforceability by customers and the process remains subject to regulatory oversight.

The claimant purchased an interest-rate collar and an amortising interest-rate swap from the defendant bank. It complained of miss-selling in 2009, but issued proceedings on 5 January 2015. The bank applied to strike out the claim or obtain summary judgment on limitation grounds. The claimant also sought to amend its particulars to allege a duty of care arising from the bank’s participation in an FCA review and redress scheme.

The central issues were when the claimant acquired the knowledge required by section 14A of the Limitation Act 1980, and whether the bank arguably owed a customer a duty of care in conducting the regulatory review.

1. Limitation. The relevant inquiry under section 14A(5) of the Limitation Act 1980 was the earliest date on which the claimant had both the knowledge required to bring proceedings and a right to bring them. Knowledge that the conduct was negligent as a matter of law was irrelevant under section 14A(9).
2. The claimant’s complaint was properly characterised as miss-selling through failures to provide advice and information. Applying the approach in Haward v Fawcetts, Halford v Brookes, Wilkinson v Ancliff, Broadley v Guy Clapham and Hallam-Eames v Merrett Syndicates Ltd, the claimant did not need knowledge sufficient to plead a complete claim. It needed knowledge, in broad terms, of the facts forming the essence of its complaint.
3. By mid-November 2009, the claimant knew that it had suffered loss, that the products had allegedly been miss-sold, and that the loss was attributable in whole or in part to the bank’s failures to explain and advise. This was more than suspicion. The claim issued in January 2015 was therefore statute barred. The claim in its existing form was struck out.
4. Proposed amendment. The amendment could proceed only if it passed the summary judgment test. The regulatory settlement agreement expressly provided that a person who was not a party had no right to enforce it under the Contract (Rights of Third Parties) Act 1999 or otherwise. The review was conducted within a statutory regulatory framework, overseen by a skilled person and monitored by the FCA.
5. In those circumstances the bank could not arguably be treated as having assumed responsibility to customers for the conduct of the review. Imposing such a duty would contradict the express contractual allocation and undermine the statutory scheme. The amendment was refused.
6. Suremime Ltd v Barclays Bank plc was distinguished because the judge there had not had the full regulatory factual background. If necessary, the judge would decline to follow it, respectfully considering it wrong on the fuller facts before him.

First-instance decision. No earlier appellate decision is stated in the judgment.