High Court examines misrepresentation claims in complex interest rate hedging case

Citation: [2023] EWHC 3185 (Ch)
Judgment on


In the case of Mark William Taylor & Anor v Bank of Scotland Plc [2023] EWHC 3185 (Ch), the High Court was presented with complex issues surrounding claims of misrepresentation in the context of interest rate hedging products. The claimants, Mark and Rachel Taylor, sought to challenge assertions made by the Bank of Scotland relating to LIBOR rates and the necessity of hedging as a condition for a loan facility. The legal principles at stake included summary judgment, the permission to amend particulars of claim, and the impact of the limitation period on the case.

Key Facts

The Taylors, as claimants, alleged misrepresentations from the Bank of Scotland induced them to enter into interest hedging agreements in conjunction with a loan intended to finance a share purchase in Taylor Hotels (Grasmere) Limited. They argued that the bank made false representations regarding LIBOR rates being genuine and unprotected from manipulation, and that interest rates were predicted to rise, making it necessary to fix the loan interest rates. They also asserted that the bank misrepresented hedging as a requirement for receiving the loan. Upon these claims, Master Clark was tasked to consider whether to grant the claimants permission to amend their particulars of claim and whether parts of these claims should be summarily judged.

Summary Judgment

Under CPR 24.2, a party may obtain summary judgment if there is no realistic prospect of success for the claim or defense being presented and no other compelling reason for a trial. This central tenet requires a consideration of the merits of the case without a full trial.

Amendment of Claim

The court’s discretion to permit amendments to claims is paralleled with the summary judgment test, focusing on the potential for real success of the proposed changes.

Limitation Act 1980

Section 32 of the Limitation Act 1980 postpones the start of the limitation period in cases of fraud, concealment, or mistake until the plaintiff could reasonably have discovered it. This involves a recognition of an objective standard for “reasonable diligence,” considering what steps a similarly positioned claimant could have taken to discover the fraud.


Master Clark determined that the pleas related to LIBOR misrepresentations did not warrant summary judgment and demanded further consideration. In evaluating the “Interest rate representation claim,” the court found that due to the fact-sensitive nature of the investigation required by Section 32 of the Limitation Act 1980, and given existing uncertainties amidst the facts established, summary judgment was not appropriate.

For the “Hedging requirement representations claim,” the court observed that the internal documents provided evidence that refuted the claimants’ assertions and determined that there was no prospect of success on the falsity of the hedging requirement representations.


In Taylor & Anor v Bank of Scotland Plc, the court robustly applied legal principles relevant to summary judgment, amendments to claims, and the Limitation Act 1980’s impact on fraud cases. The case exemplifies the court’s careful scrutiny of claims that involve allegations of misrepresentation, particularly in dealings with sophisticated financial products like interest rate hedging agreements. The decision underscores the need for claimants to establish a realistic prospect of success in their allegations and to meet the objective standards set out by the law for reasonable diligenence in fraud discovery. The nuanced interpretation of requirement representations and the emphasis on the fact-sensitive nature of limitation inquiries set a clear precedent for future misrepresentation disputes in the financial sector.

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