By John Connell

Last updated at 16:40, Friday, 13 July 2012

A unique association of experts has been set up to help businesses hit by one of the latest banking scandals.

Nick Miller

QA Legal – thought to be the first group of its kind in the country – has been formed to provide advice to Cumbrian businesses claiming to have been mis-sold interest rate swaps.

Cumbrian solicitors Tony Butterworth and Nick Miller, of Butterworths Solicitors, have set it up to address an issue which has already seen some businesses go under.

Mr Miller said: “This a first for Cumbria. No-one has put together the mix of expertise that we have.

“We have all three key elements within the association – solicitors, barristers and experts who know about what the banks have been selling.”

He added: “We have thought about things in a different way in terms of what business owners who are affected need.”

QA Legal brings together a team of solicitors; barristers with financial sector expertise and banking-related professionals.

The swap was offered to small and medium-sized businesses in the lead-up to the credit crunch, ostensibly to protect them from higher interest rates.

Sometimes the new product was made a condition of new or continued lending, without which the business could not continue.

Mr Miller said: “Business owners believed that they were doing no more than moving from a variable rate loan to one with a fixed rate.

“The idea for this often came from their relationship manager whom they trusted.

“They have been surprised and distressed to learn that what they actually signed up to was a complex financial contract, a financial derivative, with long-term consequences including large ongoing and termination charges.”

Mr Butterworth added: “The biggest problem for businesses struggling with these products is that they are paying very much higher interest payments in times where bank base rate is at an historic low.

“They are often tied in for a long period with no way out other than payment of a large exit payment, which they cannot afford. Some businesses have already gone bust as a result.”

The Financial Services Authority (has announced an agreement with the four main clearing banks to set up a redress scheme.

However, the precise terms of this and the businesses it will affect are unclear.

The banks have also agreed that they will not “foreclose or adversely vary existing lending facilities” except in exceptional circumstances.

Mr Miller said: “The two toughest elements of this issue for business owners is that they are faced with the prospect of claiming against the bank that is currently financing their business and that the process is potentially very costly.”

In addition to Mr Miller and Mr Butterworth, the QA Legal team also includes solicitors Gordon Deane and Jared Duffy and barristers Iain Mitchell, Colm O’Liathain and Professor Julian Roberts.

For more information on the team visit www.qalegal.co.uk.

First published at 14:05, Friday, 13 July 2012
Published by http://www.cumberlandnews.co.uk