RBS faces new litigation threat over GRG

Herald Scotland, 21.06.16


SMALL businesses who believe they were pushed under by Royal Bank of Scotland’s controversial Global Restructuring Group are being offered a fresh opportunity to join a legal action against the bank.


RGL Management has a fighting fund in place, is headed by experienced professionals, and has a full legal team working on a success fee basis.


It hopes to launch a claim against RBS which could reach £1billion or more, and is launching a UK roadshow with a meeting on Thursday in Edinburgh.


James Hayward, RGL’s chief executive, said: “There is a real desire to see this happen.”


Mr Hayward, a lawyer and investment banker said to have “run many large, complicated, multi-party, commercial actions and been involved in the litigation funding industry, added: “We are keen to get the message out that all they have to do is register, there is no cost. We have already processed our first 100 claimants, we are fully funded and are in a position to go to court when we choose to.


“ If we are successful, a percentage of the money we recover will be taken by the group to pay costs and legal fees.” He said business losses ranged from “single-digit millions to in excess of £50m”..


The group will allege torts involving dishonesty including an unlawful means conspiracy. A similar action is being brought by the RBS-GRG Business Action Group, which was launched two years ago by former software executive Neil Mitchell, and is believed to have 300 viable claims. Although not-for-profit, it asked for contributions to funding, and has changed its legal advisers three times.


Mr Mitchell this month launched his own private criminal prosecution against senior RBS executives, alleging they orchestrated the unlawful seizure of the company and its sale for half its real value. RBS denies any wrongdoing.


In a report commissioned by former business secretary Vince Cable from entrepreneur Dr Lawrence Tomlinson in 2014, GRG and its property offshoot West Register were accused of sabotaging customers by engineering breaches of loan agreements, then pulling lending and grabbing company assets.


In 2013 The Herald highlighted similar allegations by businesses including Glasgow Chiropractic and developer Bayfield in Edinburgh, and has reported since 2010 on developer Derek Carlyle’s battle with GRG bankers and his victory last year in the Supreme Court.


A review commissioned by RBS from its legal advisers Clifford Chance, in response to the Tomlinson report, found “no evidence the bank had systematically defrauded customers”. RBS subsequently cancelled all Mr Tomlinson’s accounts with the bank and threatened to sue him.


The FCA was due to publish a report on the GRG, disbanded in 2015, by the end of last year, but it has been delayed due to being reviewed by the bank.


Mr Hayward claims the bank’s review is “wholly inappropriate” and likely to produce a “deeply flawed” report, which the FCA has denied,saying changes can only be made to the report at the discretion of its independent “skilled persons”.


The bank is also facing a £1.2bn litigation by the RBS Shareholder Action Group over its 2008 rights issue.


RBS declined to comment on the issues last night.


The meeting is at the Grosvenor Hilton, and businesses should register if they wish to attend.


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