To date in (the Republic of) Ireland, it seems that the only swap mis-selling case to have been settled was the David Agar versus Ulster Bank case which was reported last summer. At least two sets of claims, both against Ulster Bank, are meandering through the court, reported here and here.
And at the start of April 2013, a Dublin couple initiated what is believed to be the first swap mis-selling case against AIB. The case reference is 2013/3521 P. The case was mentioned last week at the Commercial Court division of the High Court. Robert Madden and his wife Rosaleen are reportedly suing AIB over what is reported to be a €45m swap product. They are being represented by Dublin 2 solicitors, Downes who are carving out quite a niche with these cases, being the solicitors on record in the two Ulster Bank cases referred to above.
Just to remind you, interest rate swaps are products which banks sell borrowers which provide insurance against interest rate increases eg if you borrow €100m when the interest rate is 5% you might buy a swap to protect you if the interest rate rose above 6%, but when interest rates reduced, the borrower had to pay the bank, and with the main ECB rate at 0.75% these payments are huge.
In the case of the Madden couple and their case with AIB, they claim they are paying €1.3m per annum in additional payments to AIB for these swap products. The Maddens are reportedly claiming the swap products cover longer periods that the term of the loans and that they seemingly didn’t know or understand that they had been sold a swap product by AIB. The redoubtable Judge Kelly has agreed to fast track the case.
AIB is being represented by Alfred Thornton and Company.
The view on here is that, with the reluctance of the Central Bank to investigate swap misspelling and to put a general scheme of compensation in place, there will be a steadily-increasing trickle of these cases. In the UK, some €2bn has been refunded to borrowers to date. You will a feature blogpost on swap mis-selling here.