- February 25, 2013
- Posted by: Josiah Hincks Solicitors
- Category: Business Law Updates
A businessman who lost £1.2 million in a disastrous spread-bet on movements in a bank’s share price has no viable defence to a debt claim. However, the High Court ruled that he can pursue a counter-claim against a spread-betting company which he claims failed in its statutory duty to protect his interests as a consumer.
After the loss was incurred, the businessman had signed a settlement agreement with the company by which he acknowledged the debt and agreed to pay what he owed by instalments. The company for its part agreed to suspend legal proceedings and to waive interest. The court dismissed the businessman’s arguments that the agreement was not binding and ruled that the company was entitled to summary judgment against him for the whole of the debt.
However, the court declined to strike out the businessman’s counter-claim in which he alleges that the company was in breach of its own customer agreement in failing to close out his position whilst his account was still in credit. He also claims that the company acted in breach of its statutory duty to act honestly, fairly and professionally in accordance with the best interest of its clients.
The court ruled that the counter-claim required fuller consideration than was possible on an application for summary judgment. However, the court noted that, in pursuing his case, the businessman would inevitably face arguments that consumers also have to take responsibility for their own decisions and that he was the ‘author of his own misfortune’ in failing to close out his position himself.