RBS has set aside a £400 million fund for a complaints scheme to return complex and opaque fees wrongfully charged to 4,000 of the 12,000 companies, many of which were forced into insolvency, that were handled by the bank’s discredited Global Restructuring Group (GRG) between 2008 and 2013. This follows the publishing of preliminary findings of an FCA investigation which astonishingly found that two thirds of these customers were potentially viable businesses. Compensation for fees will be small consolation to those owners who lost their businesses because of GRG’s actions. Any money will go the administrators and liquidators of the businesses and not the owners.
So, what of the other businesses not in the 4,000? Many owners are still mounting a class action against the bank? Well, they will just have to plough on. Maybe the FCA report will never see the light of day and this is just a pre-emptive move to cloud the issue. Let’s hope the Government is not fooled by this. These business owners should be compensated and the banks should bear the costs of their misdeeds “pour encourager les autres”.
Destroying viable businesses is no way to run an economy. Proposals by the Insolvency Service to introduce a pre-insolvency moratorium period are under consideration. The sooner these are enshrined in Insolvency Law the sooner the balance between debtor and creditor in a business that can be saved can be achieved. This quite frankly is good for the banks and good for the country. Maybe some good will come out of the GRG saga after all.
Alan Tilley – Managing Partner & Chairman, BM&T
9th November 2016