Not only did the collapse of Lehman Brothers set off a financial crisis that rivalled the Great Crash of 1929, it also triggered an unprecedented surge in customer claims against regulated intermediaries in Hong Kong, especially based on mis-selling. For regulated firms, customer complaints are not just ordinary civil claims, but must be handled in accordance with regulatory obligations, some of which apply where firms are entering into settlement discussions with customers. Post-Lehman, with heightened scrutiny from market regulators, there are many risks for firms in settlement discussions. Here are some suggestions on how to mitigate them.
A settlement agreement is a contract. As with any commercial deal, parties to a settlement are free to negotiate terms with a view to their own best interests – in the cut and thrust of negotiation. However, even under ordinary principles of contract law, there are circumstances in which settlement agreements can be...