NAB Customer Support Group Head John Glare Press Release



In February 2013, John Glare commenced proceedings against Clydesdale Bank plc (“CB”) in the Court of Session arising out of the miss-selling of a tailored business loan (“TBL”). In their Defences served in May 2014, CB denied that the TBL had been miss-sold. CB have now conceded in the litigation that the TBL was miss-sold. They have admitted that John Glare should not have been sold a 25 year loan. They have admitted that the loan was in breach of their own internal standards.

This is a significant U-turn on the part of CB. Throughout the course of this long-running dispute with Mr Glare, they have maintained that there was no miss-selling of the TBL and that the 25 year loan sold to Mr Glare was appropriate. This recent admission is in stark contrast to a letter sent to Mr Glare in November 2010, in which CB insisted that they had acted “in a professional and understanding manner when dealing with his lendingrequirements”. In the same letter, CB described the 25 year loan provided to Mr Glare as “financially the most suitable option for him”.

The litigation will now continue with the focus being on firstly whether the miss-sold TBL caused the serious losses suffered by Mr Glare and, if so, what were his total losses.

This concession on the part of CB arises from CB’s concerns about having to deal with a number of difficult issues raised in Mr Glare’s Court of Session Summons. Mr Glare had submitted several reports from experts in the financial services industry in support of his claim that the TBL was not an appropriate product. These included reports by Professor Michael Dempster of Cambridge University and Simon Jacquiss, a leading expert in this field.

One of the difficult questions facing CB was how it quantified the “break costs” that it imposed on Mr Glare’s account when his fixed rate TBL was terminated. In his Summons, Mr Glare had argued that these break costs were not recoverable. CB could not demonstrate a direct link between the termination of the TBL and any alleged “break” in a corresponding hedging instrument.

Mr Glare has also raised a claim under Section 140B of the Consumer Credit Act 1974 to the effect that the relationship between himself and CB was “unfair”. In conceding that the loan was miss-sold, CB have acknowledged that Mr Glare has a right to pursue a claim under the 1974 Act. This Act gives a Court a wide discretion to compensate any customer in an “unfair relationship”. It is understood that there is currently no judicial decision in respect of the interaction between Section 140 and tailored business loans.

Litigation is continuing in the Commercial Court of the Court of Session. Mr Glare’s solicitors are Balfour+Manson LLP. His Counsel is Iain Mitchell QC.

About Scott Simpson

Landlord/Property Developer sold a Fixed Rate Loan, 'Tailored Business Loan' by Yorkshire Bank. These Type of Business Loans Contained Hidden or Embedded Swaps With Huge Break Costs.