Rubenstein v HSBC Bank Plc

Rubenstein v HSBC Bank Plc

HSBC was negligent and in breach of statutory and contractual duties in recommending the EVRF to Mr Rubenstein, failing to explain the market risks, and misrepresenting the product as equivalent to a cash deposit. The loss suffered by Mr Rubenstein was caused by the very risk the statutory regime and the advice were meant to protect against—market risk—and was not too remote or unforeseeable. The statutory consumer protection regime under FSMA and COB rules imposed liability for such loss. The ex gratia payment by AIG Life was to be credited against damages as part of the continuous transaction.

Parties
Appellant/claimant: Adrian Rubenstein; Respondent/defendant: HSBC Bank PLC
Jurisdiction
England and Wales
Judgment Date
12 September 2012
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal allowed in part; cross-appeal dismissed
Legal Topics
Negligent Investment Advice, Breach of Statutory Duty, Remoteness of Damage, Causation, Consumer Protection, Suitability of Financial Products
Banking Law Financial Services Regulation Contract Law Tort Law Negligent Investment Advice Breach of Statutory Duty Remoteness of Damage Causation +2 more

Case Brief

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Parties

Adrian Rubenstein

Appellant/claimant

HSBC Bank PLC

Respondent/defendant

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether HSBC was negligent and in breach of statutory and contractual duties in recommending the Enhanced Variable Rate Fund (EVRF) to Mr Rubenstein
  2. 2 Whether the loss suffered by Mr Rubenstein was caused by HSBC's breaches or was too remote/unforeseeable
  3. 3 Whether the statutory regime under the Financial Services and Markets Act 2000 (FSMA) and the FSA Conduct of Business Rules (COB) imposed liability for the loss

Ratio Decidendi

HSBC was negligent and in breach of statutory and contractual duties in recommending the EVRF to Mr Rubenstein, failing to explain the market risks, and misrepresenting the product as equivalent to a cash deposit. The loss suffered by Mr Rubenstein was caused by the very risk the statutory regime and the advice were meant to protect against—market risk—and was not too remote or unforeseeable. The statutory consumer protection regime under FSMA and COB rules imposed liability for such loss. The ex gratia payment by AIG Life was to be credited against damages as part of the continuous transaction.

Court Disposition

Appeal allowed in part; cross-appeal dismissed

Orders

  • Mr Rubenstein entitled to recover damages for his loss, calculated as per the judge's obiter findings, giving credit for the ex gratia payment of £7,195.23.
  • HSBC's cross-appeal on liability dismissed.