The steps banks can take to revive their battered reputations - Greg Wright

Following seven years of campaigning by the APPG, SME Alliance and others who had been mistreated by their bank, the Business Bank Resolution Service (BBRS) was established earlier this year as a voluntary scheme by the UK’s seven largest banks, to resolve disputes between eligible SMEs (small and medium-sized enterprises) and participating banks. There was hope this development would provide SMEs with a speedy route to justice.

However, the APPG has written to the Chancellor Rishi Sunak to express its fears that the BBRS is falling short of its aims when it comes to the eligibility process.

The APPG signed off on the framework for the BBRS and the group believes it can potentially reach fair outcomes for businesses. However, the group has uncovered what it believes are significant failings, which could undermine its credibility.

The letter added: “This sign off was conditional on the BBRS achieving its stated aims..of securing satisfactory, proper redress for outstanding past cases and, generally, providing redress for SME businesses who are otherwise denied it, including those too large for the FOS (Financial Ombudsman Service) but not large enough to access legal redress.”

The APPG continues to have considerable concerns that the BBRS is falling significantly short of its stated aims and is pressing for improvements.

So where do the MPs believe the BBRS needs to raise its game? To be eligible to apply to the BBRS businesses must be below both maximum turnover and balance sheet limits, with lower limits in turn applying to historical cases.

These limits are currently too low and unfairly restrict access to the BBRS to a considerable proportion of potential claimants, particularly as businesses need to be significantly larger than this to take high court proceedings, according to the APPG.

Cases are also currently ineligible for the BBRS if they have been through a designated ‘excluded scheme’; subject to a previous settlement; or been the subject of legal litigation, the letter states.

Mr Hollinrake’s letter added: “Many unresolved cases are excluded as a result, as in none of these circumstances..has the case necessarily been independently, properly or fairly addressed, indeed in many instances the opposite. This is potentially a fatal flaw and seriously undermines confidence in the BBRS, while failing to draw a line under past events.”

Concessionary cases need to include those where there has been a prior settlement but it can be demonstrated this was prejudicially arrived at, such as by legal or financial duress or by the actions by the bank, the APPG claims.

The APPG wants Mr Sunak to ask the chief executives of UK Finance , the trade body for the financial services sector, and the BBRS member banks to adopt a constructive approach to implement significant changes to the financial limits and a revision of the eligibility restrictions to help more victims gain justice.

UK Finance said the launch of BBRS had followed “considerable positive engagement” by all groups involved in its development, including business groups and SME representatives.

A spokesman said: “It provides access to a dispute resolution services for historical cases where businesses have not previously had an opportunity for their complaint to be externally reviewed. ..Some 99 per cent of small businesses can now use this new resolution service or the Financial Ombudsman Service.”

A Treasury spokesperson said: “It’s right that the BBRS focuses on providing a resolution for SMEs who don’t have anywhere independent to take their claim. We’ve set out high level guidance for what the BBRS should achieve but specific decisions about eligibility are not for the Government to comment on.”

Lewis Shand Smith, Chair of the BBRS stated: “The BBRS’ rules have been formally established. They were unanimously approved by the Implementation Steering Group (ISG) comprising seven bank representatives, seven representatives of SMEs and an independent Chair, in February 2021. At this meeting the ISG also confirm it would disband.

“The BBRS itself did not approve the rules within which it delivers its service, nor can it change them. Our mission and focus is to help SMEs with unresolved banking complaints to find a resolution. We encourage SMEs in Yorkshire to come to the BBRS, so that we can determine whether we are able to help them.”

The BBRS offers an opportunity for the banks to redeem themselves. That’s why the concerns raised by the APPG must be taken seriously and cases which have previously been through a flawed settlement process should be re-examined.

If the banks have behaved honourably, they will surely have nothing to fear from a rigorous re-examination of their actions.

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