Professor Philip Lane:

This always goes back to the systemic element that we addressed in terms of how we were handling the examination versus the individual circumstances of each case. Of course, a court case can fully consider the entire nature of the interaction between the customer and the bank. The customer might have been told something verbally. There will be a range of documents to be considered. At systemic level, the issue of prevailing rates arises. On the basis of our work and the advice we received, we concluded the prevailing rate, at a systemic level, is the rate applying when a customer goes off the tracker. The conundrum concerned what should have been offered when tracker mortgages were no longer being offered. We are saying the customers in question should have been offered a tracker mortgage. That is why there is compensation. I am referring to cases where the contract did not refer to a fixed-margin tracker but to whatever the bank decided was the tracker at that time. In terms of the calculation of what the tracker amount would have been in autumn 2008, when bank funding was through the roof, it would have been an expensive tracker.

Let me return to the core of how we are doing this. Nothing we do here and no offer of compensation or redress inhibits any individual in any way . First of all, we are saying that, in the examination, the customers have the option to test the appeals mechanism. Second, of course, everyone has the right to go to court if he or she feels the contract was violated.