City AM, 21.12.17
Early coverage of the start of our legal action in the London press:
A group of small businesses and individuals have today kicked off a legal action against Clydesdale Bank and National Australia Bank which could be worth more than £1bn, sending a formal letter to both institutions’ headquarters.
The letter before action, designed to give a party one last chance to settle before the matter is taken to court, outlines complaints made against Clydesdale and its subsidiary Yorkshire Bank at a time when it was wholly owned by National Australia Bank.
But Clydesdale has said it will defend itself “in the strongest terms possible”, as a spokesperson added: “The allegations contained within the letter are not accepted by the bank.”
RGL Management, the group which is representing the claimants, alleges that small businesses and individuals suffered losses as a result of the banks’ tailored business loans (TBLs). These included hedging arrangements and “swaps” that were designed to freeze interest rates for businesses, but meant they often ended up paying more when rates fell.
In a Treasury Committee in 2014, National Australia Bank’s chief executive David Thorburn admitted the products were not regulated by the Financial Conduct Authority and said that with hindsight “it was clear we were selling them to customers who did not always understand what they were getting into”.
The bank did offer compensation to some victims as part of a redress procedure, but RGL’s legal team believes they may be able to claim damages for a full recovery of losses.
City A.M. understands there are currently hundreds of claimants who have joined the case, but this could range into the thousands. Each individual case is looking for damages between £100,000 and several million, sources said.
“We have fired the first salvo. We expect Clydesdale and NAB to attempt to frustrate the process of loss recovery at every opportunity with the usual tactics and interlocutory manoeuvres of delay and obfuscation – designed to test our mettle and to drive up our legal costs from the very early stages,” said the chief executive of RGL James Hayward.
“We are fully funded, however, to deal with this approach and ready for a tough fight.”
RGL is being funded by litigation investor Augusta Ventures. Its legal team includes barrister Andrew Onslow from 3 Verulam Buildings, who led the claims against Royal Bank of Scotland’s controversial rights issue, barrister Lisa Lacob, and a team of solicitors from Michelmores headed by Garbhan Shanks.
A spokesperson for Clydesdale said: “The bank has dedicated substantial effort in recent years working through this historic conduct matter, engaging openly and transparently with customers as part of a wide-ranging remediation programme. We have made significant progress in resolving the vast majority of cases.”
Read the press article on City AM