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In a move that has been widely criticised, the Royal Bank of Scotland has announced that it is closing its compensation scheme for SME’s that were funnelled into and mistreated by the bank’s Global Restructuring Group (GRG) during the 2008-2013 financial crisis.
RBS, which remains a taxpayer-controlled bank, said in a statement on Friday 20 July 2018, that it would close the redress scheme to new complaints on Monday 22 October 2018.
The basis of the bank’s decision seems to be because it has only received around 1,230 complaints from around 16,000 customers eligible to enter the redress scheme and that it is now receiving around 6 complaints per week, having declined from a peak of around 35 per week in December 2016.
Of the 1,230 complaints the bank has received to date, only 803 cases have been resolved, with just 370 claims upheld. Despite RBS putting aside £400 million to cover the GRG compensation scheme it has so far only offered a total of £125 million to victims of GRG. This includes the £115 million offered to 3,500 customers as part of an automatic refund process which ended in July 2017. The remaining £10 million has been offered to 370 complainants whose complaints have been upheld.
The redress scheme is overseen by retired High Court Judge Sir William Blackburne. He has received 169 appeals and upheld around 15 cases in full or in part, resulting in total awards of £38,000 in additional redress.
In a statement, Mike Cherry, the National Chairman for the Federation of Small Businesses said, “From the outset, the GRG redress process has moved at a snail’s pace. A decade on from many of these cases arising, we still have a situation where a third of claims are unresolved. The independent consideration of consequential loss claims only started a few weeks ago. Now we’re being told it’s ending in the very near future. By its own admission, RBS is still receiving six complaints a week about GRG. If claims continue to come through at that rate in the lead-up to the deadline then, clearly, it will need to be extended. The tactics deployed by GRG destroyed lives and livelihoods. Ten years on, justice for our small firms is long overdue”.
Myerson’s specialist banking litigation team act for a number of clients who were transferred into the Royal Bank of Scotland’s GRG division. If you were transferred into GRG and believe you suffered financial loss as a result, the time to act is now given the bank’s deadline of 22 October 2018 for claims to be submitted. Please contact us today on 0161 941 4000 or email us at firstname.lastname@example.org.