Statement from the APPG on Fair Business Banking - The Business Bank Resolution Service (BBRS) 1/12/2020

Following the campaigns of the APPG, SME Alliance and others for justice for those who had been mistreated by their bank, the BBRS was established as a voluntary scheme by the 7 largest banks. The APPG absolutely accepts that there are some unreasonable limitations with the BBRS and have set our concerns from the very start 131218 Stephen Jones UK Finance

Due to the nature and of some of these historic cases and the current legal framework, the BBRS had to be a voluntary scheme. We have always objected to a turnover threshold, but this had to be a voluntary scheme due to the Statute of Limitations (6 years), the patent difficulties in proving fraud and the fact that courts do not judge cases based on a fair and reasonable test, rather simply what the black and white terms of the agreement the customer signed when they entered into it. Therefore, the APPG does, in principle, support the BBRS and will work to ensure that it is fit for purpose. Of course, the BBRS is not a compulsory mechanism for anyone with a dispute with their bank and complainants can try others approaches as they see fit.

The other difficulty is, there is nothing else on offer from the Government or, indeed, the opposition that would resolve the historic problems. Yes, some cases will be excluded from the scheme based on these arbitrary eligibility criteria, but many others will have access to justice for the first time. I think it would be very unfair to those in the latter group to not try to engage as part of the steering group as long as we feel we can influence things in a way that will increase the number of claimants who can get access and meaningful, fair compensation. To this end, the APPG, SME Alliance, the FSB, IoD and CBI, who all sit on the steering group, have managed to secure change including:

  • Awards limit of £350k for the historic scheme and £650k for the forward-looking scheme of £650k being moved to a default position whereby the full amount of any claim should be paid without limit
  • The event date of mistreatment being moved from 2008 back to 2001
  • Businesses that can demonstrate that material evidence was not considered properly in an ‘independent scheme’ will qualify for a ‘boundary cases’ approach, where the BBRS will assist the complainant to secure a fair and reasonable outcome with the bank
  • Our preference for future cases would be a Financial Services Tribunal, but this would require legislation to bring commercial lending into the regulatory perimeter Fair Business Banking for All. There is currently no appetite within government for this approach.

    Of course, the proof of a pudding is in the tasting and we will continue to provide constructive criticism as the service moves from pilot to practise. Please do feel free to share this correspondence with others.