Financial Services matters Update: Claims against RBS GRG and other bank business support units

20 Jul 2016
 
 
 
The Collyer Bristow LLP review of financial disputes issues
FINANCIAL SERVICES matters
UPDATE
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JULY 2016 (2)
 
 
Claims against RBS GRG and other bank business support units
 
Claims against GRG

Many claims against the RBS Global Restructuring Group (GRG) await the outcome of the FCA Review into its activities which is now long overdue. There have been press reports that RBS plans to set up some kind of compensation scheme following the publication of that review. However, some customers have already issued legal proceedings against RBS relating to GRG’s behaviour. For example, the first trial involving such allegations, Property Alliance Group (PAG) v RBS, began in the High Court on 26 May 2016.

Allegations against GRG have been made for many years and further impetus was given to these in a report by Lawrence Tomlinson in 2013. The Tomlinson Report alleged that RBS was deliberately engineering defaults by its customers to ensure that they could be placed within GRG and, once in GRG, the customers were charged excessive fees which contributed to a further decline in the business, leading to receivership or administration. He alleged that the customers’ business and property were sometimes sold at an undervalue to RBS’s associated company, West Register, which could then retain the assets until prices rose in the future.

Since the Tomlinson Report, further disclosures relating to GRG’s activities have come to light as a result of legal proceedings brought against RBS. In the recent case of Hockin v RBS, the Court refused the bank’s application to strike out allegations against GRG and allowed the case to carry on towards trial.

However, allegations are not confined to RBS. Similar allegations have been made against the “business support units” (BSUs) of other leading banks, including Lloyds, Barclays and HSBC. In Re Angel Group Ltd, claims against Lloyds’ BSU have led to the appointment of separate liquidators (“conflict liquidators”) to investigate claims against the bank and the company’s administrators that they conspired to force the customer into administration.
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