British swap scandal lawyers seek NZ cases

A BRITISH law firm which has made hay from the interest rate swap scandal in Britain is fishing for clients in New Zealand.

QA Legal contacted the Sunday Star-Times following the paper’s recent coverage of interest rate swap sales by some of our banks to farmers here.

These sales are now the subject of a probe by the Commerce Commission.

Interest rate swap sales have been big news in Britain, as many small businesses have found themselves trapped into paying extraordinarily high interest rates by long-term swap deals sold to them by banks just before interest rates crashed.

Colm O’Liathain said QA Legal, which was representing British businesses that had been sold swaps, said the firm had developed a good understanding of the issues in Britain, which could be valuable to farmers and other businesses in New Zealand labouring under swap deals many now say they never understood.

O’Liathain said the swap sales by British banks had been a landmark event in banking history, with banks having found a way of shifting their interest rate risk to customers while also being able to earn unseen margins on the swap deals.

He said that if businesses needed protection against rising interest rates, traditional fixed-rate loans would have been a cheaper way of getting it.

As with any broad misselling scandal – and Britain’s Financial Markets Authority has concluded that misselling took place – there is a payday for lawyers, but profiting by representing New Zealand farmers is not the only reason QA Legal is interested in New Zealand.

O’Liathain, who spends several months a year in Auckland, said QA Legal was keen to hire New Zealand and Australian lawyers to provide the British cases with 24-hour legal capability.