5 - Private Law Claims for Mis-selling

Summary

The preceding chapter showed the piecemeal nature of regulatory protections for participants in the derivatives markets and explained how it has been justified on the basis that an alternative means of redress is available, namely private claims for mis-selling based upon ‘contract and negligence’. This chapter explores the reality of this type of private law claim. The argument focuses on those claims that are typically deployed by participants in the OTC derivatives markets and on the patterns that emerge from these mis-selling cases. The next chapter considers the related topic of contractual defences relied upon in this context. Together, these two chapters demonstrate why there have been so few successful mis-selling claims and question the assumptions behind the prevailing regulatory scheme.