We have today learnt that the FCA and Lloyds Banking Group have appointed Sir Ross Cranston to determine whether the Griggs Review, the compensation scheme established after the criminal convictions of 6 individuals in connection to the HBOS Reading fraud, is delivering fair outcomes and adequate compensation for the victims of the fraud.
Since the Griggs Review was established in February 2017, the APPG has received numerous representations from many of the individuals that have gone through the Griggs Review which all follow a consistent message: that the Review is not delivering fair compensation for the losses that occurred as a result of the fraud and that it is simply not fit for purpose. A report produced by Jonathan Laidlaw QC even found that the scheme was “defective”, based on a “flawed” methodology and “partial” to the bank’s interests. We look forward to seeing whether this is confirmed in the review led by Sir Ross.
Kevin Hollinrake MP, Co-Chair of the APPG on Fair Business Banking, said: “Sir Ross has good credentials and clearly possesses the legal ability and experience to conduct this review thoroughly. Whatever the outcome of this review, we must see all those individuals already considered by the Griggs Review to have access to the new Dispute Resolution Service (DRS). Justice must finally be done and be seen to be done for these individuals who have fallen victim to this fraud.”
He continued: “The Terms of Reference must be strengthened for this to have any credibility. The parameters give no attention to whether the bank has disclosed adequate information to the actual victims of the fraud. This goes to the heart of the concerns raised about the Griggs Review: that Lloyds did not disclose to the victims the basis of decisions and the evidence used to reach a settlement.”
The APPG has received numerous evidence from individuals who all make consistent complaints that the bank refuses to disclose any documentation, refuses to discuss the methodology nor the basis of decisions, is reliant on documentation that has been in the hands of proven fraudsters and does not offer any appeal mechanism other than the courts, which is completely inaccessible for the victims of the fraud who, by the very nature of the fraud, are financially vulnerable.
Furthermore, the bank has reneged on their promise to “cover reasonable fees for professional advice whilst in the Griggs Review.” The APPG has received evidence that the bank has refused to pay for forensic accountant’s reports and will not even wait for their reports in some cases.
Lloyds Banking Group has taken the illogical position that every business involved in the fraud would have failed, thus avoiding the need to consider the shareholders of the defrauded businesses in the Review. Furthermore, LBG has excluded the directors and shareholders of the businesses that had no contact with those convicted, regardless of the fact that these businesses would have dealt with HBOS employees who were acting on the direct orders of those convicted.