Mr Glare sued Clydesdale Bank PLC for damages arising from an alleged mis-sold Tailored Business Loan (“TBL”). The Bank admitted that the TBL was not a suitable product for Mr Glare and that they should not have entered into a loan agreement with him with a 25 year fixed interest rate. The action was brought following the appointment of receivers to Mr Glare’s business and his own personal bankruptcy. Mr Glare argued that, but for the mis-sold TBL, :- (i) he would have sought and obtained a variable rate loan and (ii) his business would have been successful and he would not have been made bankrupt.
The Court did not accept either of Mr Glare’s arguments. It appears that much of the Court’s decision turned on: (a) the contemporaneous documents which were produced to the Court and spoken to in evidence and preferred to the pursuer’s personal recollection; and (b) the performance of the witnesses for Mr Glare.
In relation to (i), the Court did not accept that, had Mr Glare not been offered the TBL, he would have sought, and been offered, a variable rate loan. The Court found on the evidence that Mr Glare had wanted the security of a fixed rate loan product and had specifically requested such a loan. The Court also noted that even if Mr Glare had sought and secured a variable rate loan, during the relevant period in question in 2008, the interest Mr Glare would have paid under a variable rate would have been the same as that paid under the TBL.
In relation to (ii), the Court heard evidence in relation to the financial performance of the business. The Court concluded that the business had been loss making for several years; had not generated sufficient income to meet its expenditure and that the fall off in the level of business was attributable to the recession. Although the Court heard evidence from an accountant relating to how the business could have performed (by making a comparison with other businesses of the same nature) the Court was not persuaded that there was merit in this comparative analysis and felt that much of the case against the Bank had been influenced by the benefit of hindsight.
Ultimately, the case failed because Mr Glare was unable to demonstrate to the satisfaction of the Court that but for the mis-sold product he would have sought and obtained a variable rate loan or that there was a causal link between the losses suffered by the business and the actions of the Bank as opposed to the prevailing market conditions at that time.