A planned resolution service must give “meaningful redress” to people who have lost their businesses because of banking misconduct, according to the co-chairman of an influential Parliamentary group.
Kevin Hollinrake, the co-chairman of the All Party Parliamentary Group on Fair Business Banking, has written to Stephen Jones, the chief executive of UK Finance, raising concerns about the Dispute Resolution Service Implementation Steering Group and the planned Business Banking Resolution Service.
In his letter, Mr Hollinrake states: “The APPG has had very constructive conversations with yourself and other stakeholders, but we feel that we have reached an impasse. For the avoidance of doubt, we feel that we must address these issues if we are to remain part of the steering group.”
Mr Hollinrake says: ““While we acknowledge that there is an ongoing working group focusing on insolvency, this must give meaningful redress to the people that have lost their businesses. The BBRS must ensure that the directors and shareholders of insolvent businesses must have a mechanism to bring a claim against a bank if they have reasonable grounds to do so.
The letter also says: “We note that you suggest that BBRS should not be opened to complainants who are ‘unhappy’ with the outcome of a previous independent review and that we should engage with the reviews of past reviews to offer evidence that outcomes have not been fair and reasonable.
“This however, misses the point. We are not suggesting that there should be a wholesale re-opening of cases if a complainant is simply ‘unhappy’, but rather a sensible exceptions process for individuals that have documentary evidence to support their assertions that the outcome of their past redress scheme was not fair or reasonable.
“We accept that we need to avoid opening the floodgates and facilitating spurious complaints. A sensible exceptions process could be developed to allow consideration of cases that have merit and provide closure to a meaningful number of complainants without revisiting the vast majority of cases that have been settled.”
A UK Finance spokesperson said: “We greatly appreciate the ongoing valuable input from all the business representatives involved in developing the Business Banking Resolution Service (BBRS), including the SME Alliance and APPG on Fair Business Banking. The business groups’ involvement in the design is helping to shape a service that takes account of the lessons of the past and sets it up for success in the future. Once the new service is established, 99.5 per cent of all small and medium-sized businesses will be eligible to have their unresolved disputes considered either by the Financial Ombudsman Scheme or by the BBRS.
“Working with our members, we will carefully consider the detail of the APPG’s letter regarding eligibility and will respond in due course. The BBRS is not intended to be a redress scheme for all SMEs that have previously had the opportunity for their complaint to be independently reviewed. The government, the FCA and Simon Walker in his independent review have all stated that this would be inappropriate. Questions in relation to previous reviews are for individual institutions and regulators as appropriate and not for the Independent Steering Group of the BBRS.”