Crestsign Ltd v National Westminster Bank Plc & Anor

This is a renewed application for permission to appeal. The applicant is the claimant, Crestsign Limited, whose claim for negligence for economic loss against the respondents, National Westminster Bank PLC and The Royal Bank of Scotland PLC, was dismissed by Mr Tim Kerr QC, sitting as a deputy High Court Judge in the Chancery Division. The claim was in respect of what was said to be a negligent mis-sale of a complex interest rate swap to Crestsign.

Lewison LJ, on the papers on 16 December 2014, gave Crestsign permission to appeal on ground 1 of its three grounds of appeal. That ground goes to whether the judge was right to conclude that the basis upon which the respondents dealt with Crestsign served to preclude any duty of care arising towards Crestsign in relation to the advice that the judge found that the respondents had, by Mr Gillard, actually given to Crestsign.

Lewison LJ, however, refused Crestsign permission to appeal on its second and third grounds. The second ground is to the effect that, whilst the judge was correct to hold that the respondents had a duty to take care in providing the information and explanations to Crestsign about the products that they, by Mr Gillard, wished to sell, he was wrong to hold as he did in paragraph 153 of his judgment that the duty went no further than that. In particular, Crestsign argued before the judge and wishes to argue under its second ground that the information duty required the respondents to inform and explain to Crestsign the different types of available interest rate hedging products, including in particular an interest rate cap, being products that the banks were able to provide.

In Lewison LJ’s view, the judge was plainly right to confine the information duty within the limits that he did. The judge’s view was that to adopt Crestsign’s case would be to extend the nature of the information duty to that of an advice-giving duty. Mr Coleman QC, for Crestsign, has developed the argument Crestsign would wish to raise under ground 2 by reference, in particular, to the helpful supplementary written argument which he has produced.

The end result is that I am not as confident as was Lewison LJ that this ground of appeal has no real prospect of success. As it seems to me, the points succinctly made in Mr Coleman’s supplementary written argument, as helpfully expanded and explained by him, show that there is a proper factual basis upon which the assertion as to the existence of the wider information duty can be founded. I regard this ground too as having a real prospect of success.

The third ground is that even if the first two grounds fail, there is also a real case for the argument that the judge was wrong to conclude as he did in paragraphs 165 to 167 that the respondents discharged the information duty that he found they owed in relation to what are referred to as “break costs”. Again, I regard the points advanced in the supplementary argument, as helpfully explained by Mr Coleman, as raising a real question as to whether or not the judge’s decision on this part of the case was correct. Again, respectfully differing from Lewison LJ, I regard this ground of appeal as having a real prospect of success.

Accordingly, I shall give Crestsign permission to appeal on grounds 2 and 3.