Legal claim is launched over tailored business loans
A group of companies has launched a legal claim against a major bank in connection with the alleged mis-selling of tailored business loans (TBLS).
RGL Management, a company managing the group claim for the small and medium-sized businesses, said it had started legal action for a large claimant group against Clydesdale Bank (CYBG) and its former owner National Australia Bank Limited for conduct in relation to its TBLs.
A CYBG spokesman said the claim would be defended “in the strongest terms possible”.
In a statement, RGL said the claims group consists of around 2,000 claimants from England, Scotland and Wales, and is still growing.
The statement added: “The group includes a number of companies driven into insolvency.”
The spokesman said that the first claims were issued in the Chancery Division of the High Court, representing 148 claimants in total.
RGL said it was continuing to verify and prepare further claims which will be issued in the English and Scottish courts.
RGL has instructed English solicitors, Michelmores LLP, led by partner, Garbhan Shanks, with specialist banking counsel, Andrew Onslow QC and Lisa Lacob. In Scotland, RGL has instructed Cat MacLean, Partner and Head of Dispute Resolution of MBM Commercial LLP and Craig Sandison QC.
The case is being funded by the UK’s largest litigation funder, Augusta Ventures.
RGL Management said it was not possible to quantify the exact value of the claim at this stage.
James Hayward, the CEO of RGL Management said: “We are pleased to be launching this action today to recover the hundreds of millions of pounds in losses owed to claimants.”
Garbhan Shanks a partner, at Michelmores LLP said: “This is the first significant multi-party claim against a bank by its customers since the financial crash.
“We are confident this action will secure substantial compensation for the claimant group.”
A spokesperson for CYBG said: “CYBG has dedicated substantial effort in recent years to engage openly and transparently with customers as part of a wide-ranging remediation programme, including conducting thorough investigations into complaints from SME (small and medium-sized enterprise) customers.
“RGL has served the bank with one claim on behalf of three customers and we are currently considering the detail of this.
The spokesperson added “We strongly refute any suggestion that the bank has not fully investigated historic cases involving SME customers and we will defend this claim in the strongest terms possible.”
Last year, the All Party Parliamentary Group on Fair Business Banking and Finance (APPG) called on the Financial Conduct Authority to launch an investigation into the “unanswered questions” surrounding tailored business loans provided to small and medium-sized enterprise customers by Clydesdale Bank.
At the time, a CYBG spokesman said: “We are confident that reviews of our historic business lending products have been conducted in a fair and rigorous manner.”
In March, Kevin Hollinrake, the Conservative MP for Thirsk and Malton, who is co-chairman of the APPG, told the House of Commons that thousands of tailored business loans had been sold to businesses.