Third wave of compensation claims launched in group action against banks
Litigation specialist RGL Management Limited has today filed a further tranche of claims in the ongoing group action against Clydesdale Bank plc including Yorkshire Bank (Clydesdale), now part of Virgin Money UK plc, and its former owner National Australia Bank Limited (NAB).
The action relates to fixed interest rate loans or “Tailored Business Loans” (TBLs) sold to business customers between 2001 and 2012.
The claim form was filed on behalf of a further 365 SMEs representing 609 individual loans.
It builds on two previous claim forms issued in May 2019, and brings the total number of SMEs in the RGL group action to 509, representing 867 individual loans.
The allegations against Clydesdale and NAB relate to the banks’ conduct in respect of fixed interest rate TBLs and give rise to claims in Deceit, Misrepresentation, Negligent Misstatement, Breach of Contract and Unjust Enrichment.
RGL says the claims arise out of the banks “falsely and unlawfully demanding break costs from borrowers who sought to terminate fixed rate business loans early”.
It explains the group action also relates to the banks “deliberately and systemically inflating the fixed interest rate payable without first informing customers”.
The case argues that all fixed interest rate TBL borrowers have unknowingly and unnecessarily paid hundreds of millions of pounds of additional costs and interest, all of which went to increase the banks’ profits.
Clydesdale Bank has responded that the allegations contain “absolutely no substance or merit.”
RGL says around 6,500 customers were sold TBLs, meaning there are still thousands yet to join the ongoing proceedings.
RGL has instructed solicitors, Michelmores LLP, led by partner, Garbhan Shanks, with specialist banking counsel, Andrew Onslow QC and Lisa Lacob.
In Scotland, RGL has instructed Cat MacLean, partner and head of dispute resolution of MBM Commercial LLP and Craig Sandison QC.
The case is funded by Bench Walk Advisers. Bench Walk managing director Adrian Chopin said: “RGL’s claim is a very strong one and we are pleased to be able to assist.
“Our investment will ensure the expenses of bringing this claim and of insuring against adverse costs are covered. We are confident RGL will be able to obtain redress for its group members.”
Ian Lightbody, chairman and founding member of the Virgin Money Remediation Support Group, said: “It’s a great achievement by RGL to add so many new claimants to the ongoing litigation and is testimony to their expertise in this area.
“The VM RSG will continue our work in assisting victims of Clydesdale Bank and NAB on a number of fronts, one of which is backing the RGL group action as the route to a recovery of serious losses suffered by fixed rate TBL borrowers at the hands of these banks.”
James Hayward, CEO, RGL Management said: “With the first court date now on the horizon, we are more confident than ever of securing the hundreds of millions of pounds in compensation owed to Clydesdale and Yorkshire Bank customers.
“There is an overwhelming body of evidence to prove the banks’ unlawful treatment of their fixed rate loan business customers.
“RGL is now redoubling its book building efforts to ensure as many borrowers as possible receive the compensation they deserve. Further claim forms will be issued as soon as they are ready.”
However, the Clydesdale Bank spokesman responded: “There continues to be absolutely no substance or merit in the allegations made in RGL’s claim and we have made this clear in our defence.
“Over recent years we have worked hard to investigate all historic SME conduct issues and we are confident we have done the right thing for those customers involved.
“We will continue to defend our position robustly throughout any legal process.”