SMEs join legal action against Clydesdale and National Australia Bank over Tailored Business Loans



Over 500 SMEs have joined action against Clydesdale Bank and National Australia Bank (NAB) as RGL Management Limited (RGL) issues a third wave of High Court claims over the banks’ Tailored Business Loans.

Today, RGL filed a further tranche of claims in the ongoing group action against Clydesdale Bank plc including Yorkshire Bank, now part of Virgin Money UK plc, and its former owner National Australia Bank Limited, arising out of fixed interest rate loans or “Tailored Business Loans” (TBLs) sold to business customers between 2001 and 2012.

The claim form was filed in the Chancery Division of the High Court on behalf of a further 365 SMEs representing 609 individual loans.

This builds on the 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. A copy of this most recent claim form has been sent to the Defendants’ respective solicitors.

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. 

More specifically, the claims arise out of the banks falsely and unlawfully demanding break costs from borrowers who sought to terminate fixed rate business loans early, as well as in relation to the banks deliberately and systemically inflating the fixed interest rate payable without first informing customers. 

As a result, all fixed interest rate TBL borrowers have unknowingly and unnecessarily paid hundreds of millions of pounds of additional costs and interest, all of which was directed at and went to increase the banks’ profits.

A case management conference (CMC) has now been scheduled for 14-16 December 2020. In the meantime, RGL continues to process and verify additional claims from across England, Scotland and Wales and intends to issue further proceedings in the coming months.

While it is not yet possible to quantify the exact value of the claims, losses from the combined TBL related claims are expected to amount to hundreds of millions of pounds.

Around 6,500 customers were sold TBLs, meaning that there are still thousands yet to join the ongoing proceedings. As a result of the systemic unlawfulness of the banks, all fixed rate loan TBL borrowers of Clydesdale and Yorkshire Bank are likely to have claims, even those who believe their business loan was paid off without any difficulties. With the legal process now fully in train, the amount of time left to join the group action will be limited – borrowers should act now.

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. After the Event (ATE) insurance is also in place, removing the adverse costs risk to claimants.

Adrian Chopin, Bench Walk managing director, said: “RGL’s claim is a very strong one and we are pleased to be able to assist.  Our investment will ensure that the expenses of bringing this claim and of insuring against adverse costs are covered.  We are confident that RGL will be able to obtain redress for its group members.”

Ian Lightbody, chairman and founding member of the Virgin Money Remediation Support Group, commented: “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.

“There are still thousands of former Clydesdale and Yorkshire Bank business loan customers who have claims but are yet to join the RGL group action.  Time is running out. We urge anybody who thinks their business might have been sold a fixed interest rate Tailored Business Loan by either bank to get in touch immediately.”



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