The banks must prove they have left scandalous past behind - Greg Wright

Many of Britain’s big banks have been rocked by scandals ranging from the manipulation of foreign exchanges to the mis-selling of complex interest-rate hedging products. This misconduct created a living hell for victims who had placed their trust in financial services firms which had been a byword for prudence.

For several years, MPs, regulators and business groups have agreed that SMEs (small and medium-sized enterprises) with legitimate grievances against the banks have lacked a fast, inexpensive route to justice.

Hopes had been raised that a new Business Banking Resolution Service (BBRS) would provide justice for bosses who lost everything after being mistreated by the banks. The BBRS has finally been launched to a chorus of approving business voices.

The BBRS will use alternative dispute resolution techniques to settle unresolved complaints from larger SMEs with seven participating banks, who make up the majority of the business banking market.

The service, which was due to begin last autumn, has been two years in the making. It has been set up on a voluntary basis with small business groups and banks working together.

The BBRS stresses that it is an independent organisation with an independent board drawn from SMEs and other backgrounds.

It was designed by SMEs and banks working together and the scheme covers all larger SMEs. Even businesses which are ineligible can apply to be heard.

A BBRS spokesman said: “Decisions are made by our chief adjudicator, who is a Deputy High Court Judge. The banks have signed a contract with us which means they must abide by our decisions.”

Jonathan Geldart, Director General of the IoD, said: “The impartiality and independence of the BBRS is essential in it being able to effectively discharge its duties to claimants.”

The All Party Parliamentary Group on Fair Business Banking (APPG), a long-standing critic of the big banks, said it had spent two years working with stakeholders to set up a robust and independent system to protect small business customers.

From the start, the APPG had concerns about the scope of the proposed service. However, the APPG believes the BBRS can determine “fair and reasonable outcomes” for small businesses.

It added: “This sign off is, however, conditional, as concerns remain about the commitment of the banks to resolve historic complaints. Good faith has been enshrined in the agreements between the banks and the BBRS, and we will be taking part in a post-implementation review of the service.

The APPG said: “It is important to note that one of the key principles upon which the BBRS was founded was to restore trust between banks and businesses. This is more important now than ever. It will be critical that the spirit of this mission is embraced both by the BBRS and, critically, by the banks when they are dealing with historic cases that have been through previous so-called independent reviews.

“We are encouraging all those with cases to dispute against business banking – whether eligible for the service or whether a boundary case - to sign up to the BBRS. The BBRS has been designed to be a learning organisation and has been given a mandate to assist boundary cases, and this will only be tested if we have sufficient numbers of complaints going through the service. We will reserve final judgement on the efficacy of the BBRS until the review is concluded.”

Not everyone affected by banking misconduct is a fan of the BBRS. One victim said on social media: “The vast majority of affected SMEs are not happy in the slightest with the BBRS.”

Some critics have expressed concerns about the fact the banks have contracted to the scheme on a purely voluntary basis.

The BBRS deserves a chance to prove itself. The ball is firmly in the banks’ court. The new resolution system will provide them with an opportunity to show they have embraced reform and left their scandalous past behind.

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