Jonathan Laidlaw QC found that the review is “procedurally defective and unfair” and its methodology and guiding principles are “flawed and appear partial to Lloyds Banking Group’s interests”.
These conclusions are contained in a 28-page document published by the SME Alliance, which supports business people who are in dispute with their banks.
Last year, Lloyds recruited Professor Russel Griggs to lead an investigation into whether it should compensate customers who became victims of fraud at the hands of former HBOS staff in Reading.
The move came after a number of financiers were jailed for carrying out a fraud.
Speaking last year, Lloyds’ chief executive Antonio Horta-Osorio said: “We are absolutely determined that victims of the crimes committed at HBOS Reading are fairly, swiftly and appropriately compensated.”
However, the SME Alliance claims that many victims of the misconduct at HBOS Reading are still waiting for payments. According to the SME Alliance, one victim died of cancer while still in dispute with the bank.
Mr Laidlaw found a number of “serious deficiencies” in the Griggs process. These included the fact the review was set up “without reference to the views of the HBOS Reading victims”.
Nick Gould, chair of the SME Alliance, said: “Lloyds has failed to honour the promises of its CEO to deliver fair, swift and appropriate redress for victims who have been suffering for more than a decade.”
“The Griggs Review is a near perfect example of the bank being judge and jury of its own misdeed.”
A Lloyds Banking Group spokesman said: “The group deeply regrets and apologises for the distress caused to the customers affected by the criminality relating to HBOS Reading between 2004 and 2009.
“We are determined that all victims of the HBOS Reading fraud are fully compensated.
“All 71 customers in the review have now received offers, with 64 of these already accepted, and the review, led by Professor Russel Griggs, is now reaching its conclusion.
“We firmly believe the Griggs Review was the right approach to secure compensation for victims of the HBOS Reading fraud.”
The spokesman added: “The Griggs Review is a voluntary process put in place by the group with the clear objective of providing fair and reasonable compensation for customers in a way which was quicker and less expensive than through a court process.
“We believe this objective has been fulfilled.”
Professor Griggs placed customer input at the heart of his review into the criminality at HBOS Reading, according to Lloyds Banking Group.
The early progress of the review was dictated by the time customers required to provide this input, according to Lloyds.
The reasons for each decision are clearly explained to customers, and if they believe that there are factors which have not been properly understood, or fully considered, they are able to provide additional information and have their cases reassessed, the Lloyds spokesman added.