In Qadir and another v Barclays Bank plc  EWHC 1092, the High Court struck out a claim for negligent advice against the defendant bank, on the basis that the three-year limitation period under section 14A of the Limitation Act 1980 had expired.
In spring 2008, Barclays Bank (the Bank) advised the claimants (Q) about certain interest rate hedging products. In June and July 2008, the Bank provided Q with three loans with interest rate swaps. Due to the onset of the global financial crisis, Q was liable to pay substantial sums under the swaps and in 2009, 2010 and 2011, enquired with the Bank about restructuring the loans and breakage-costs. Eventually in 2014, Q terminated the swaps. On 5 January 2015, Q commenced proceedings against the Bank relying on the safety-net provided by section 14A. Broadly, that section provides an additional three years from when the claimant knew, or should have known, key facts. Accordingly, Q had to show that it had an arguable case that it did not have the necessary knowledge before 5 January 2012.
The court held that the relevant knowledge was the factual essence of what was subsequently alleged as negligence in the claim. The running of time was not dependent on Q knowing that the alleged acts or omissions were negligent and, therefore, that Q had a legal complaint. As the claim related to the suitability of the swaps, the relevant “building blocks” of knowledge needed were that the swaps were loss making and that alternatives had been available. Q had this knowledge and had been in a position to investigate whether a complaint against the Bank was viable, before 5 January 2012.
The decision is a warning to potential claimants that they should not delay in issuing proceedings after realising that they have suffered a loss. It is also a reminder that section 14A is triggered by knowledge of facts which would justify the claimant in investigating the possibility that the defendant has done something wrong.