Nasar Zamir of Congruent discusses the RBS complaints process for GRG losses and how specialist guidance can best support a claim
On 8 November 2016, the Royal Bank of Scotland (RBS) announced a new complaints process for some of the customers whose banking relationship was handled by RBS’s Global Restructuring Group (“GRG”) during the period 2008-2013. RBS will review customer-initiated complaints and, if a complaint is upheld, the customer will then have the opportunity to submit a further claim for consequential losses.
An independent third party (ITP) – retired High Court Judge Sir William Blackburne – has been appointed to oversee direct losses; however, there is no right of appeal to the ITP in relation to a claim for consequential losses. RBS noted in the most recent update of 1 February 2017 that appeals to the ITP will result in the immediate withdrawal of any offer made by the bank.
The process is a voluntary review undertaken by the bank. This involves:
- Complaint investigation – the bank will investigate the complaint from a customer, however, the complaint must be initiated by the customer.
- Redress determination – at the first stage, redress means compensation for direct losses.
- Consequential losses – if the bank upholds the complaint then it will need to assess what is fair and reasonable redress and permit a claim for consequential losses, i.e. the cost of being deprived of money, and other losses suffered.
What is ‘on offer’?
Eligible customers will automatically receive a refund of “complex” fees. Beyond that, an eligible customer will be able to submit a complaint in respect of “direct losses”. We assume that the direct losses claimed will have to be itemised and that the process will not be a mere mechanical exercise based on specific records held by the bank (if it was limited to that it would not require the right of appeal to the ITP which has been added to the process).
If a complaint for direct losses is successful, the customer will be able to submit a claim for consequential losses, but there will be no right of appeal to the independent third party. We assume all claims will need to be very detailed and will require input from a specialist firm with considerable experience in dealing with banks and financial complaints.
What assistance can the client receive with itemising a claim?
Obviously, the client can deploy any of his or her staff who have the right skills to provide support for a claim, but any third party professional assistance will be subject to the Compensation Act 2006, which requires firms to be authorised or exempt. This legislation recognises that solicitors (and certain other lawyers) are exempt and therefore should be able to help you submit a claim. The legislation also allows you to seek advice from charities, not-for-profit advice agencies or financial advisers, although it is highly likely that none of these professional advisers will be able to help you in a matter of this complexity. Given that the majority of accountants have not obtained the required authorisation to support these claims themselves, the best possible course of action is to seek specialist guidance from a trusted and respected provider.
How should claims (for direct losses or consequential losses) be supported?
The bank has published a simple complaint form (which can be seen on its website) but it has invited submission of “any additional pages or documents that you wish to be considered”. This suggests that claims will require a considerable amount of specialist detail to be submitted in order to be successful. We believe that successful claims will need to be fully itemised by a firm with expert knowledge in this field as any failure to submit vital details could negatively impact on the final outcome.
How likely is it that the client will recover all losses from being in GRG?
It is difficult to say whether or not the client will be able to recover all losses at this stage; it is too early to tell. Currently, the bank has announced that it has put aside £400m to satisfy claims and some commentators believe that this will be insufficient. What is certain is that you can help your client greatly improve their chances of realising a successful claim with specialist guidance in place.
Nasar Zamir is director of Congruent, financial risk advisers specialising in dealing with complex financial products.
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