RGL will pursue damages for all losses incurred as a result of the Bank’s actionable behaviour. RGL’s legal team believes that even those businesses which may have already received some sort of compensation payment as part of the Bank’s own “redress” procedure will be entitled to claim damages for a full recovery of losses as a matter of law, as will businesses which have been put into liquidation or dissolved.
Thousands of small business and individual customers of Clydesdale and Yorkshire Banks have suffered significant losses as a result of entering into TBLs. All losses suffered including consequential loss will be pursued as part of the RGL action. Due to liabilities asserted by the Bank as a result of entering into TBLs, it became impossible for customers to switch banks. As locked-in victims, they were then often subjected to various other forms of abuse by the Bank, including the manipulation of property valuations resulting in LTV ratio covenant breaches, manipulation of overdraft facilities, and the unfair levy of inflated bank charges.
It is also apparent that the TBL product was deliberately conceived to sit outside the regulatory regime that protects consumers from other forms of hedging products.
While we cannot, for strategic reasons, reveal the factual and legal details of the claim, we can confirm that the causes of action to be pleaded include allegations of dishonesty and fraud.
Whistle-blowers
The conduct of the Bank is at the centre of the case identified by RGL Management. We would therefore be most interested to hear from, or about, past or present employees of the Bank, their advisors, valuers, consultants, or insolvency practitioners, who may have knowledge of this type of behaviour. The identity of potential whistle-blowers will of course be kept strictly confidential. Please visit our Whistle-blower page.
Limitation
The arguments and causes of action identified by RGL Management mean that limitation or “time bar” defences that might otherwise be possibly available to the Bank should be rendered an irrelevance. However, if any prospective claimant believes, by reason of the passage of time, they may be running into (or may already have) limitation issues, then they should seek immediate advice from a solicitor.
The Legal Process
In summary, the litigation is at an advanced stage, with the trial of four test claims having concluded on 20 December 2023. The Judge, Mr Justice Zacaroli, is currently deliberating, and will take the time he needs – possibly 3 to 4 months given the sheer volume of material he has to consider – to write his judgment and to deliver it to the parties. We expect this to be in the early part of 2024.
In the meantime, we are still accepting new registrations, but we do not anticipate being able to do so for much longer.
- Initially, a new registrant is contacted by the team at RGL. This is the beginning of RGL gathering the information relevant to the claimant business’ relationship with the bank, and to what was done to the claimant business by the Bank. This information includes all of the documentary evidence (including emails, letters, loan agreements, texts etc) and some initial witness evidence, to enable us to better evaluate your case.
- As part of this process, you will authorise RGL Management Limited (RGL), through signing a Litigation Management Agreement, to instruct the legal team to investigate the merits of your claim and, if merited, further authorise RGL to conduct and manage any subsequent litigation on your behalf.
- RGL’s legal team has issued, and served on the banks, nine claim forms to date, listing over 1400 claims. We continue to assist in working up additional cases with the legal team for inclusion on further claim forms.
- The first Case Management Conference (CMC) took place before Mr Justice Zacaroli in December 2020. This CMC was the first hearing before the Judge and focused purely on how the court wanted to shape the litigation going forward. The Judge concluded that there should be 4 test claims (including a Scottish claim), which should be heard together at trial to decide all of the issues in dispute at once. This means that the Court heard about all aspects of the banks’ misconduct in one go, rather than on a more piecemeal basis.
- Following further Case Management Conferences, and the process of Disclosure, the High Court Trial began on 2 October 2023 and lasted for 12 weeks. The purpose of the trial was to obtain judgement in favour of the claimants on the four “test” cases. The legal arguments, submissions and evidence all related to the legal causes of action being pursued by the claimants in the RGL Group. The Judge will have to decide whether the defendant banks are liable for their conduct in this regard. If liability is established, he will also have to decide what types of losses were caused by such unlawfulness.
Commercial arrangements
The cost of running the claims against the Bank will be substantial, but claimants will not be asked to contribute to the funding of the legal action. Litigation funding provided by a leading specialist litigation funder is being used, and will continue to be used, to pay the costs of the ongoing Court proceedings.
In the event that the claims against the banks are successful, the funding spent by the litigation funder is reimbursed from the gross amount recovered together with the payment of the balance of the ATE insurance premium then due to the ATE insurers.
It is very important to note that if the claims do not succeed, there would be no reimbursement of funding and no payment of any balance of any ATE premium due.
On success, after reimbursing/paying these amounts to the funder and ATE insurers, the net recovery amount will be split 45%/55% (or 35%/65% above a £375m net recovery threshold) between the funder and the claimants. So, the majority – the 55% or 65% – of the net recovery amount will go to the claimants.
More detail is set out in RGL’s Litigation Management Agreement (LMA), a written summary and explanation of which and further information about the costs of the proceedings is provided before the LMA is signed.
Concerns about ongoing relationships with the bank
Some potential claimants unavoidably continue to bank with Clydesdale/Yorkshire Bank and may be concerned about a hostile reaction in response to their inclusion in a group legal action. RGL has discussed this possible issue with the All Party Parliamentary Group on Fair Business Banking (APPG). Please click on the link to see our recommended course of action.