On Monday the FCA published its summary report on the independent review of RBS’s treatment of SME customers referring to the now defunct Global Restructuring Group (GRG) between 2008 and 2013. Under political pressure to release its findings, the FCA published the 69 page summary and there continues to be pressure on the FCA for the full report to be disclosed publicly.

Allegations against RBS

For several years now, RBS GRG has been the subject of allegations that it intentionally led hundreds of small businesses to the point of collapse in the pursuit of a profit-making exercise for the bank.

The summary report published this week states that over a third of the RBS small business customers transferred to GRG were not viable at the time of transfer and could be expected to face insolvency or administration regardless of the bank’s actions – and hence should not have been transferred to GRG in the first place. The BBC reported last month that the full FCA 361 page report showed 92% of “viable” firms seen by GRG experienced "inappropriate action" such as interest charges being raised or unnecessary fees imposed.

For seed “inappropriate action” such as interest charges being raised or unnecessary fees imposed.

However, the summary also said that only 16% of the cases sampled displayed inappropriate action by GRG which “appeared likely to have caused material financial distress.”

RBS GRG Complaints Process

RBS has acknowledged that in some areas it could have done better for SME customers in GRG. In November 2016 the bank set aside £400 million to launch a GRG complaints process to refund small and medium sized businesses for shortcomings in the banking service provided by RBS to them between 2008 and 2013.

The redress process is being overseen by retired High Court judge, Sir William Blackburne, and allows an automatic refund of complex fees for SMEs that were customers in GRG between 2008 and 2013. Since its launch in November 2016, the bank has received 939 complaints from eligible customers and around 150 files have been reviewed.

Do not lose the right to bring a legal claim against RBS

Whilst former GRG customers may wait for the outcome of their complaint within the bank’s redress scheme, it is vital that they do not lose sight of the limitation date for any potential legal claim against RBS. If a limitation period expires, former customers of RBS GRG will lose all rights to bring a legal claim against the bank. This is particularly pertinent because it is not yet clear that RBS will pay adequate compensation via their GRG complaints process for the losses caused.

Even where limitation is not an issue, SMEs affected by the actions of RBS GRG should seek legal advice to be appraised of all options open to them for pursuing the bank.

Seek Legal Advice

You may want to obtain legal advice:

  1. To preserve any rights you may have to pursue a legal claim against RBS, as set out above. Such rights are subject to prescribed time limits, which are strictly enforced by the courts. Missing the time limit may leave you with no recourse to the courts when you need it most.
  2. If you wish to make a claim for consequential loss. RBS states that such claims will be assessed in accordance with established legal principles – which can be complex. Legal advice is necessary to prepare a claim which properly sets out your entitlement to recover such losses.
  3. To understand your position if your business has been wound up and how you may restore it to claim redress.
  4. If you have reason to believe that any other restructuring unit of a different bank treated your business in the same way during the financial crisis.