GRG Disbanded – Berg is ready to receive your GRG complaints and has litigation funding available
Hot off the press on 08/08/14 is the news that GRG has been disbanded, and Derek Sachs is “moving on”. It would appear that the final straw for GRG may have been the controversial appearance of Derek Sachs and Chris Sullivan before the Treasury Select Committee.
Please see links below.
Andrew Tyrie MP branded RBS “wilfully obtuse” in the evidence it gave to the committee about its GRG division. This follows strenuous statements in oral evidence by RBS to the Treasury Select Committee that GRG was “absolutely not a profit centre”. Chris Sullivan, RBS’s deputy group Chief Executive, conceded the point in a letter to Andrew Tyrie MP dated 15 July 2014. In his letter, Chris Sullivan also corrected his statement to MPs that he had not seen a draft version of an independent report into GRG written by Clifford Chance, which the banks have to date relied upon as having given them the “all clear”. When this report came out earlier this year, it was widely regarded as a white wash.
For the full article in The Times follow this link http://www.thetimes.co.uk/tto/business/industries/banking/article4154965.ece?shareToken=ff452ca4b45f503b2e88f9b80867b6cd, to see the letter from Chris Sullivan see http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/treasury-committee/sme-lending/written/11373.html and to see the evidence given by Chris Sullivan & Derek Sachs on 17 June 2014 see http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/treasury-committee/sme-lending/oral/10753.html (from Q526 onwards).
The Treasury Select Committee has also recently heard evidence from Lloyds Bank. Lloyds confirmed it had sent letters to customers that appeared to come from independent lawyers when the letters were actually sent to customers by the bank’s in-house litigation department. Subsequently, in a letter to the committee’s chairman Andrew Tyrie MP, Lloyd’s Chief Executive Antonio Horta-Osorio acknowledged the bank had issued the collection letters under the name SCM solicitors since the late 1980s and confirmed a decision had been made this year to stop the practice. Andrew Tyrie said the evidence from Lloyds, which included an example of one of the letters, was very concerning. The letter received from Lloyds Bank dated 15 July 2014 can be found here.
It is now widely acknowledged that the FCA review scheme in relation to consequential losses has failed to deliver satisfactory redress for those that have taken part. For clients who were waiting to pursue any GRG claim this could now be combined with a consequential loss claim relating to the interest rate swap, although we know a lot of our GRG/specialised lending clients did not have swaps.
We have received some recent reports from some clients that their GRG manager has been very eager to be accommodating – a significant change from the past! This was then followed by a call from RBS’s “research department” who are filling out a satisfaction survey as to how did the client rate their GRG manager. It would appear that the bank want to be able to refer to statistics showing that X% of people are happy with the way that they are dealt with by their GRG manager or something similar.
We reported in our last update that Promontory and Mazars are carrying out investigations on behalf of the FCA into GRG’s activities. We understand that they are still in the process of taking evidence so there is still time to hear from business owners affected. Please lodge details of your case now as they are looking to bring receipt of new evidence to a close imminently. They will not accept evidence from this firm and it will need to be submitted directly by you.
We are still working with funders and hope to be able to set out a proposal by which potential claimants can have their case assessed and funded but realistically this is now likely to be in early September/October due to the amount of movement in this changing market with new funders coming in and some leaving the market. There is positive developments as funders are now looking at much smaller claims than they have done historically.
Litigation funders will pay some or all of the costs/expenses associated with a dispute, in return for a share of the proceeds of the dispute, if it is successful. If the litigation is not successful, the funder bares the costs it has agreed to fund. Almost always, litigation funding would be combined with a policy of insurance to cover the opponent’s legal costs, should the action not be successful. This is clearly critically important when taking on a major bank.
Litigation funders first need to understand the nature of the case and will typically require an advice from Counsel which assesses the case as having 60% or more prospects of success.
If you are interested in your case potentially being funded by a third party litigator, please let us know. To get started, we would need the following information:
- A list of the main individuals involved;
- A summary of the key issues; and
- A chronology which sets out in brief detail key dates and events.
As we have already highlighted in previous updates, it is essential that claims are protected to ensure that they did not become time barred. Early assessment is therefore very much our recommendation.
We remain committed to highlighting the devastating impact some banks have had on businesses. To this end, we have recently completed our second Banking Report. You should have received a copy of this by email. If you have not, please let me know and I can arrange to forward a copy to you.
If there are any issues in this update or the report that you would like to discuss, please contact me or one of our Banking and Financial regular regulatory team on 0161 833 9211.
Banking & Financial Regulation Team