RBS faces class legal action
Herald Scotland, 11.10.16
THE Royal Bank of Scotland is set to face a class legal action that could run to billions of pounds over claims it drove thousands of business to the wall for its own profit.
It follows reports the publicly owned bank embarked on a “dash for cash” to boost fee income through its Global Restructuring Group (GRG).
Firms earmarked for help from RBS were hit with hefty fees and fines and saw their assets bought up on the cheap, according to an investigation by the BBC and BuzzFeed. Confidential files suggest bank staff could also pocket bigger bonuses by pinpointing firms for a restructure.
RGL Management has now confirmed it will launch the legal action against the bank in early 2017 in litigation it claims will prove to be “disturbing” for the bank and “cast a shadow” over its customer relations.
James Hayward, chief executive of RGL, said: “Many of the victims of GRG have claims that are time-barred. But those claims can be resurrected by virtue of RBS’s concealment of the true nature of GRG’s activities.
“It will be forcefully argued that insufficient knowledge was publicly available as to the truth of what happened until the 2013 publication of the Tomlinson report.
“Consequently, limitation ought not to run against these claims until six years from November 2013.
“Although heavy resistance from RBS is expected, there is reason for confidence. The allegations that will unfold in this litigation will be disturbing for the bank and will continue to cast a shadow over its attempts at reconciliation with its customer base.”
Jon Pain, RBS’ chief conduct and regulatory affairs officer, said: “RBS has been very clear that GRG’s role was to protect the bank’s position, where possible by working with distressed businesses to return them to financial health.
“In the aftermath of the financial crisis we did not always meet our own high standards and we let some of our SME customers down.
“We have found no evidence that the bank either inappropriately targeted such businesses to transfer them to GRG or drove them to insolvency. Nor did it buy their assets at a lower than market price.”
The Financial Conduct Authority said it had received a report investigating allegations of malpractice at RBS’ GRG unit.
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