In Marsden v Barclays Bank Plc the UK High Court granted the defendant summary judgment against Mr Marsden's claims arising out of his allegation that the defendant had mis-sold him two interest-rate swaps.
Following cancellation of his swaps, Mr Marsden and the bank entered into a restructured loan agreement and a full and final settlement in respect of claims connected with the swaps.
The bank subsequently reviewed its sales of interest-rate-hedging products, and offered redress to Mr Marsden in the sum of £608,614.14, together with any additional amounts Mr Marsden wished to claim for consequential losses. In seeking additional compensation, Mr Marsden challenged the settlement agreement for want of consideration and alleged that it was entered into as a result of economic duress. Mr Marsden also alleged breach of statutory duty, negligence, breach of contract and misrepresentation by the bank.
In dismissing Mr Marsden's claim, the Court held that:
- The settlement agreement was an integral part of the arrangements between Mr Marsden and the bank - its execution subsequent to the new loan agreement did not render it void for want of consideration
- The bank's threat to cancel the new loan facility if the settlement agreement was not signed was a threat to adopt an entirely lawful position
- The settlement agreement post-dated Mr Marsden's allegation that the bank had made misrepresentations to him. Therefore, the agreement's reference to "all causes of action" encompassed deceit claims
- The swaps contracts were private and, therefore, not void owing to regulatory failings
- The review of the sale of interest rate swaps was gratuitous and did not create legal relations between Mr Marsden and the bank.
See the Court's decision here.