The Sydney Morning Herald, 22.12.17
We are delighted to see that our action has been picked up by the press in Australia:
National Australia Bank and its former subsidiary, Clydesdale Bank, are being targeted in a new lawsuit seeking compensation on behalf of thousands of small business customers in the United Kingdom.
A group representing customers on Thursday made the first formal move in a legal fight over loans that were sold by Clydesdale when it was owned by NAB. NAB offloaded the UK business in 2016 after years of poor performance, including the payment of hefty compensation charges.
The legal challenge is focused on interest rate hedging products known as “tailored business loans”, which were sold to small business customers and have previously attracted criticism from UK politicians over their complexity and high cost.
While some customers have already been compensated for the products, the action will argue these businesses may be entitled to further damages. RGL Management, which is arranging the case, said “a large group of claimants” had registered for the action so far.
On Thursday, RGL said it had delivered a “letter before action” alerting NAB and Clydesdale to the legal action. RGL did not reveal the details of its claims, but said in a statement the “causes of action to be pleaded include allegations of dishonesty and fraud”.
A spokesman for Clydesdale’s owner, CYBG, said the allegations in the letter were “not accepted by the bank and if necessary will be defended in the strongest terms possible”.
The case is being financed by litigation funder Augusta Ventures. Chief executive of RGL, James Hayward, said it was “fully funded” and “ready for a tough fight”.
“Our claimant group has been waiting too long, and I’m delighted to give them the prospect of receiving proper recompense for the losses they have suffered at the hands of Clydesdale, Yorkshire Bank and NAB,” he said in a statement.
RGL is a claims management company that assembles multi-party legal actions, similar to class actions in Australia.
NAB spun off Clydesdale in 2016 after years of poor returns from the UK bank, in part because of compensation costs relating to past mis-selling of financial products.
Clydesdale, which has its main listing in London, is mostly owned by Australian institutions and retail investors, as NAB shareholders were issued the stock in the demerger of early 2016.
In the demerger, NAB said its future liabilities from misconduct relating to Clydesdale would be capped at £1.1 billion. At the bank’s full-year results in 2017, there was about £140 million left in a pool set aside to pay for any future claims.
A NAB spokesman declined to comment and referred BusinessDay to Clydesdale.
The CYBG spokesman confirmed it had received a letter relating to past sales of tailored business loans and signalled it would fight the action.
“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 program. We have made significant progress in resolving the vast majority of cases,” the spokesman said.
Read the press article on The Sydney Morning Herald