Our specialist Financial Litigation Lawyers at Slater and Gordon are assisting Small or Medium Sized Enterprises (SMEs) in advancing their claims against the Royal Bank of Scotland Global Restructuring Group (GRG) through a Financial Conduct Authority (FCA) redress scheme. For more information, call Slater and Gordon Lawyers on freephone 0800 916 9015 or contact us online.

The Royal Bank of Scotland Global Restructuring Group has been accused of driving some of their SME clients towards an insolvency process so that RBS could make a profit on buying their properties.

If your business was wrongly stripped of its assets by RBS GRG our specialist Financial Litigation Lawyers can assist you through the review on a no win no fee basis.

Overview

Banking scandals have been in the news of late with one of the most high profile being allegations being that Royal Bank of Scotland (RBS) using its Global Restructuring Group Division (GRG) to profit from small businesses in crisis. The Allegations made by SMEs were long ignored between 2007 and 2012, but persistence and the formation of pressure groups like Bully Banks persuaded Vince Cable to commission a report into the way banks treated small businesses. The Tomlinson Report, prepared by Dr Lawrence Tomlinson and published on 25 November 2013, presented worrying evidence of banking behaviour towards SMEs.

On 29 November 2013 the FCA announced a section 166 inquiry. This inquiry was conducted by Mazars, an independent reviewer known in this context as ‘skilled persons’. The FCA update on the independent review examined Royal Bank of Scotland’s treatment of business customers in financial difficulty considering the allegations of poor practice set out in the report by Dr Lawrence Tomlinson..

In 2016 a cache of documents supporting the allegations made by Dr Lawrence Tomlinson was leaked by a whistleblower to BBC Newsnight and BuzzFeed News. The confidential files reportedly contain evidence that RBS squeezed struggling SMEs to boost their profits in the wake of the 2008 financial crisis.

It was revealed that RBS staff were supposedly awarded bonuses for restructuring business customers’ debts. They did this by allegedly using unrealistically low valuations of customers’ businesses to legitimise moving companies into the Global Restructuring Group (GRG) where they then charged higher interest rates fees and applied pressure to sell assets off in order to repay loans.

In November 2016, the FCA released a statement reviewing RBS’s treatment of customers referred to its Global Restructuring Group. The FCA statement recognised RBS’s announcement of a new complaints review process and an automatic refund for complex fees charged to SME customers as an important step. The FCA statement welcomed the involvement of an independent third party providing oversight of the complaints review process.

The FCA has noted that the new complaints review process needs to be fleshed out in more detail but said the bank did not “artificially engineer” the transfer of customers to GRG.

This sparked a furious response from some small businesses which accused the City watchdog of a whitewash because it failed to address adequately one of their central allegation; that they had been put into GRG due to cash flow difficulties which were primarily the result of were put into GRG was supposedly due to cash flow difficulties alleged to have been caused by the bank selling them inappropriate derivatives, such as interest rate swaps, as conditions of lendingThe Treasury Committee has criticised the FCA in mishandling the IRHP redress scheme. Overall, the FCA conclusions are very disappointing. They do not reflect the behaviour RBS has exhibited in our experience representing SMEs in compensation claims for mis-selling derivative investments.

What Next

The detail of the complaints review process is as yet unknown Details have yet to be made public of who will be eligible to make a claim. They may use factors such as the date of entering GRG, the solvency of the business, the size of the business etc. The FCA has yet to decide what factors determine ‘unfair treatment’ or how redress will be paid.

From lessons learned during the IRHP review of the appalling behaviour of banks, it is important that businesses get ready to hit the ground running once the review begins.

Why Slater and Gordon

Slater and Gordon has assisted witnesses in presenting evidence within this section 166 inquiry and have represented hundreds of claimants in previous FCA reviews into banking behaviour in the past.

Slater and Gordon has been at the forefront of recent legal arguments between SMEs and banks. We have the benefit of pooling that experience with the years of practice we have acting for large groups and offering affordable funding solutions to legal claims.

If you believe that you should be offered redress by the bank through their treatment of your company whilst in the GRG contact us to discuss your next steps.

Call us on freephone 0800 916 9015 or contact us online and we will call you.

Slater and Gordon Lawyers is one of the UK's largest and well-known law firms with immediate legal representation available throughout the UK from our offices in London, Manchester, Birmingham, , Cambridge, Cardiff, Chester, Edinburgh, Leeds, Liverpool, Milton Keynes, Newcastle, Preston, Sheffield, Watford and Wrexham.