Simon Duncan examines the swaps mis-selling litigation.
Contractual estoppel is said to be created by the parties’ acknowledgement that, in entering into the contract, no representations were made to them, or they did not rely on any representations that were made. This doctrine has caused some difficulty for claimants in the swaps mis-selling cases. This is because the contractual terms of their contracts with the banks preclude both the existence of representations and the reliance by the claimant on any representations.
Principle
This principle was at issue in Titan Steel Wheels Ltd v Royal Bank of Scotland Plc [2010] EWHC 211, [2010] All ER (D) 137 (Feb). One of the claims advanced was that: “The bank advised Titan to take these products which were in fact unsuitable to its needs and thus is liable in negligence,” (per Mr Justice Steele at para 3 summarising the claimant’s position.)
The relevant clause of the contract contained within the bank’s Terms of Business was cl 4.6 which provided: “That any information which the bank provided to Titan relating to trades was believed to be reliable
