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 due to be announced later this year. 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 their SME clients towards an insolvency process so that RBS could make a profit on buying their properties. RBS GRG could now face a voluntary or enforced redress scheme if the Financial Conduct Authority’s review decides that the bank has breached FCA principles.

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 of RBS GRG Issue

The misconduct and regulatory breaches of the Royal Bank of Scotland (RBS) have been regular fixtures in the news and none more than the misconduct of their Global Restructuring Group Division (GRG). The allegations made by SMEs were long ignored between 2007-2012 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 report was prepared by Lawrence Tomlinson and published on 25 November 2013. The report presented worrying evidence of banking behaviour towards SMEs.

On 29 November 2013 the FCA announced a section 166 inquiry. This inquiry will be conducted by an independent reviewer who will prepare a report which will examine Royal Bank of Scotland’s treatment of business customers in financial difficulty and consider allegations of poor practice set out in the report by Dr Lawrence Tomlinson. The FCA retained Mazars and has since reported the findings will be released prior to Christmas 2015.

In response, to the FCA Inquiry and the Tomlinson Report, far from showing contrition or setting out to put matters right, RBS retained Clifford Chance to prepare its own review of the findings in the Lawrenson Report which was published on 11 April 2014

This report sought to demonstrate that GRG had a difficult job to do and dismissed many of the findings within the Tomlinson Report. It was widely received by SMEs as a predictable PR exercise.

Since then the Treasury select committee has heard evidence relating to GRG and questioned RBS in detail. The evidence of Mr Sachs and Mr Sullivan was found to be questionable and in some instances rejected. Treasury select committee declared that the report prepared by Clifford Chance should not be seen as a clean bill of health. The treasury report was published on the 10 March 2015.

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 rewarded 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.

What Next

What we now know is that RBS are gearing up to commence a review of businesses sent to GRG. They have retained consultants and we suspect have a process already agreed with the FCA.

The detail of that review process is as yet unknown. We do not yet know who will be included and who excluded. They may use factors such as the date of entering GRG, the solvency of the business, the size of the business etc. We also do not yet know 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 a review is announced.

Why Slater and Gordon

Slater and Gordon have 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 have 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 in the FCA review of RBS GRG and offered redress by the bank through their treatment of your company whilst in 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, Ashton-Under Lyne, Cambridge, Cardiff, Chester, Edinburgh, Leeds, Liverpool, Milton Keynes, Newcastle, Preston, Sheffield, Watford and Wrexham.