Farol Holdings Limited & ors v Clydesdale Bank PLC & National Australia Bank Limited [2024] EWHC 593 (Ch)

On 19 March 2024, Zacaroli J dismissed claims brought by four claimants against Clydesdale Bank PLC and its former parent, National Australia Bank Ltd, following a 12-week trial that started in October 2023.

The claims related to fixed rate loans provided by Clydesdale Bank to the Claimants and offered more generally to its business customers between around 1999 and 2012. Whilst the claims by the four claimants had proceeded to trial, over 900 claims brought by other claimants who had entered into similar loans had been stayed.

The Claimants argued that the Defendant banks had made fraudulent or negligent representations at the times of the entry and the termination of the loans. In particular, it was contended that Clydesdale Bank had not been entitled to charge them break costs on the early repayment of the loans under the contractual terms applicable to them (and that both Clydesdale Bank and NAB had known that there was no entitlement). The Claimants also argued that the explanation of the pricing of the loans at their inception had been misleading and had included hidden profit. Two of the Claimants also relied upon the unfair relationship provisions under s.140A Consumer Credit Act.

The Judge concluded that both aspects of the claim failed. He held that Clydesdale Bank had been entitled to charge break costs, and that it had not acted wrongfully in the manner in which it had priced and explained the loans when the claimants had entered into them.

A copy of the judgment is available here.

Ian Wilson KC and Richard Hanke (led by Bankim Thanki KC of Fountain Court Chambers) acted for Clydesdale Bank and were instructed by DLA Piper LLP.
Andrew Onslow KC, Lisa Lacob, Liisa Lahti and Emma Hughes acted for the Claimants and were Instructed by Fladgate LLP.