William Dooley
Associate Solicitor
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Date Published:11 Dec 2019 Last Updated:11 Apr 2021

The Cranston Review

Banking & Finance Litigation

Sir Ross Cranston has published his findings and recommendations into the compensatory Review Scheme led by Professor Griggs in to the HBOS Reading scandal. Without a shadow of doubt it has been made clear that the Griggs Review was inadequate and did not deliver fair and reasonable offers of direct or consequential compensation to the victims of the HBOS Impaired Assets Office (“IAO”) in Reading.

The Cranston Report states that there are “aspects of the Bank’s procedures which fell short in providing a reasonable basis to deliver fair outcomes”. A number of customers complaints of the Griggs Review included the Bank’s refusal to accept forensic accountants on behalf of customers and debt relief offered to some customers and ignoring the personal implications of others who had refinance to keep their business’ in operation. More specifics of the Cranston Report are set out below.

De facto Directors, Shareholders and Creditors

Despite the Bank originally stating that it would seek to compensate those who may have been affected by the criminal activities linked to the HBOS IAO and Quayside Corporate Services, shareholders were immediately excluded from the Griggs Review and the methodology undertaken when considering the status as a de facto director has been held as “unsatisfactory” by Sir Ross who has set out the deficiencies in the approach taken by the Griggs Review.

For de facto directors, shareholders and creditors, a key recommendation of the Cranston Review is that the Bank must reconsider all cases where an individual was involved with the running of a company or business and the Bank must also arrange for an independent review to consider any direct and consequential losses suffered by shareholders.

Direct and Consequential Loss

The Bank, despite seriously credible arguments being put forward on behalf of individuals, the Bank did not make a single redress payment for direct & consequential losses to any business or individual affected by the HBOS Reading scandal. The position on consequential losses is well established and can included claims for loss of opportunity, forced sale of assets, loss of
profits, claims for distress and impact on personal life, reputational damage and losses incurred by shareholders and third parties. The list is non exhaustive, but in any event Sir Ross has set out that the Griggs Review did not provide fair outcomes for victims of fraud.

For direct and consequential losses, a key recommendation of the Cranston Report is that the Bank must arrange for the reassessment of direct and consequential losses by an independent body.

Settlement Agreements

Settlement agreements are a focal point for a number of customer complaints who remain dissatisfied with the “take it or leave it” approach by Lloyds. The Cranston Report has concluded that the Bank’s conduct in relation to settlement and some of the terms of the agreements were not fair and reasonable due to the Bank’s failure to take into account the interests of customers and the lack of transparency about the terms used in the settlement agreement.

With regards to these settlement agreements, a key recommendation of the Cranston Report is that the Bank must release customers, involved in a Direct and Consequential losses assessment, from the relevant terms of their settlement agreement.

Other Recommendations

The Cranston Review has also recommended that:

  1. The Bank must reconsider customer’s eligible for debt relief payments where the debt was paid or refinanced; and
  2. The Bank engage with key stakeholders to agree the structure of the reassessment process.

Lloyds Apology

Lloyds chief executive, Antonio Horta Osoria has said that he is “very sorry” for the flaws identified in the Cranston Report and has stated Lloyds will act on the recommendations made by Sir Ross. Lloyds are currently seeking guidance from key stakeholders and individual customers to implement the recommendations of the Cranston Report and has offered to meet with individuals affected by the recommendations of Sir Ross.

Ellis Jones Involvement in Cranston Review

Ellis Jones were involved from a very early stage in the Cranston Review and made submissions prior to any individual meetings with Sir Ross. We further presented documentation on behalf of all of our clients in the Review and attended every client meeting with Sir Ross. We have acted and continue to act for many HBOS victims within the Professor Griggs Review, the Dobbs Review, the Cranston Review and will continue to represent their best interests to ensure a positive outcome is achieved.

How can Ellis Jones help?

If you believe you have been affected by the HBOS Reading scandal, please do not hesitate to contact the Banking and Financial Litigation Department. We have substantial experience in dealing with claims and complaints against the banks and financial institutions.

Please contact William Fox Bregman or William Dooley in the Banking and Financial Litigation team on 02039784721 or send an email enquiry to william.dooley@ellisjones.co.uk to discuss how we may be of assistance.