Former professional footballer Matt Jansen has launched a legal challenge claiming banking giant HSBC lost him over £2m on property loan agreements during the 2008 financial crash.
The claim was launched by Jansen, along with his wife Lucy Jansen and her father, Barry Corner using a boutique law firm, Edesia Law. The lawsuit targets HSBC UK along with HSBC Private Bank.
Jansen is a former professional footballer who played as a striker. He spent a large part of his career at Blackburn Rovers (1999-2006), making 153 appearances for them in the Premier League. However, after a motorcycle accident in Rome in 2002 that nearly killed him, he struggled to regain his first-team place.
According to court documents as seen by City A.M., Jansen was a retail client until 2005, when HSBC recommended that he transfer to the HSBC Private Bank. It stated that he understood that at the time, HSBC was seeking to build up its private client book of professional sports-persons.
In light of HSBC’s recommendation, he agreed to transfer his banking, including all current accounts and existing borrowing, to HSBC, the process of which began in May 2005.
The claim outlined that HSBC offered Mr Jansen additional borrowing. The bank offered the claimants a number of multi-currency loan products secured on various properties, through which payments could be made in currencies other than sterling.
This agreement allowed the claimants to reduce their indebtedness under the loans depending on the relevant foreign currency movements, but it also exposed them to additional losses if currencies moved against them.
The six properties in question are based in Manchester (three), Cheshire (two) and Darlington.
The loan-to-value ratio of the loans fluctuated in line with the movement of the relevant currency against sterling. Each of the facility agreements contained loan-to-value provisions that required the loans to maintain a loan-to-value ratio of either 70 per cent or 80 per cent.
An agreement was made between HSBC and the claimants as a protective measure for the global financial crisis unfolding in 2008. HSBC was allowed to automatically close the loans out when they reached 80 per cent rather than waiting to write to the claimants through the post.
By late 2008, all of the loans were closed out – however, according to the claim form, it is now known that when the six loans were closed, their loan-to-value was all in excess of 80 per cent (ranging from 82 per cent to 113 per cent).
The claim stated that HSBC owed the claimants a duty of care in tort to exercise reasonable skill and care in handling the loans.
The lawsuit outlined that HSBC breached the agreements and/or acted negligently. As a result, the claimants are suing for its losses, which are £992,282.98 if the bank closed the loans as soon as they reached 80 per cent, £346,111.37 for additional interest charged by the bank, and £643,638.01 for additional security taken by the bank.
The bank has called on City-based law firm Eversheds Sutherland for its defence. However, according to the High Court claim filing system, there are no defence documents showing for HSBC as of yet.
HSBC was contacted for a comment.
For more legal stories on City AM:
