RBS’s Global Restructuring Group (“GRG”) – Have you got a claim?

What was RBS’s Global Restructuring Group?

The Royal Bank of Scotland’s Global Restructuring Group (“GRG”) was portrayed by the Bank as being there to assist customers of RBS and NatWest in turning round their businesses if they were in financial difficulty. However, there have been a number of serious allegations made against the Bank about the conduct of its GRG Division.

What are the issues?

A number of the main allegations against the Bank were documented in a report published by government advisor, Dr Lawrence Tomlinson, in November 2013. Dr Tomlinson alleged that there had been “‘systematic and institutional’ behaviour in artificially distressing otherwise viable businesses, putting its customers ‘on a journey towards administration, receivership and liquidation’”. Alleged misconduct by the Bank included:

• RBS using its GRG division in order to generate revenue from customers in financial distress by charging increased fees, margins and by devaluing assets.
• Minor breaches of loan covenants being relied upon in order to force the transfer of customers’ businesses into the Bank’s GRG unit.
• Engineering breaches of loan covenants (e.g. by removing overdrafts or undervaluing property to adversely affect loan-to-value or cashflow covenants)

The FCA’s s166 report and a potential redress scheme

Following the publication of the Tomlinson Report, the Financial Conduct Authority (“FCA”) announced on 17 January 2014 that it had appointed an independent ‘Skilled Person’ to provide a report in relation to the allegations made against the Bank.

Over two years passed before a draft of the report was received by the FCA in April 2016, and it is anticipated that this could lead to a redress scheme being setup to enable businesses to recover losses caused by the Bank’s misconduct. However, the publication of the report has been delayed on a number of occasions and it remains to be seen as to whether a redress scheme will come to fruition.

There are strict deadlines imposed by the court to issue claims and it is likely that a number of claims will become ‘time-barred’ and will no longer be actionable unless action is taken to preserve businesses’ entitlement to bring claims.

How can Ellis Jones help you?

Ellis Jones Solicitors has received and acted upon a number of complaints from clients in relation to RBS’s GRG Division, and is experienced in advising and dealing with such matters. If your business has been transferred to GRG, please contact Paul Kanolik (paul.kanolik@ellisjones.co.uk) in our specialist Banking and Finance Litigation Department on 01202 525333 for a free initial consultation.