The case against Clydesdale Bank Plc and its trading brand Yorkshire Bank (“Bank”) centres around its tailored business loans (“TBLs”) product, marketed by the Bank to its customers when it was a wholly owned subsidiary of, and acting at the direction of, the National Australia Bank Limited.
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.
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.
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
- Initially registrants will be contacted, and we will begin to gather a significant amount of essential information about what was done to claimant businesses by the Bank. This will include the gathering of documentary and witness evidence, to enable us to better evaluate your case.
- During this process you will authorise RGL Management, through the terms of a Claims Management Agreement, to manage the analysis of your claim and any subsequent litigation on your behalf.
- RGL Management’s legal team will begin working up individual cases now, including the taking of formal witness statements, and taking certain legal steps with a view to issuing Court proceedings the early part of 2019.
- The exact process of how a significant body of cases will be dealt with by the Court will not be known until a Judge considers the relevant case management issues. However, we anticipate some form of group representative action, whereby a relatively small number of cases, representing the full range of repeating factual patterns of the Bank’s culpable behaviour, will initially be progressed to trial. The Court’s findings of liability would then be rolled out, in a binding fashion, against the Bank, with respect to similar factual situations in the large number of cases standing behind the representative ones.
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.
The intended arrangements will be: –
- Claimant contribution to legal costs – zero
- Claimant contribution to After the Event (ATE) legal insurance – zero
- Claimant share of successful net outcome – 55%
Upon the aggregate group recovery reaching a threshold of £375 million, the return to successful claimants increases to 65%, to the extent that recoveries exceed that threshold.
Further details will be provided in the Claims Management Agreement
In addition, on 8 December 2017 we introduced a referral incentive scheme, which means that a successful claimant will be entitled to an additional 1% (100 basis points) of the Pro-rated Recovery Share (as per the CMA) for every successful new registrant he or she introduces, up to a maximum of 10% (1000 basis points). Please read the full details of this incentive.
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.