Business Banking Resolution Service - new service for SMEs to resolve disputes with their banks

The Business Banking Resolution Service, a new service for small and medium sized businesses to resolve disputes with their banks, will launch in Autumn 2020.

What is it?

The Business Banking Resolution Service (BBRS) is a complaints scheme for small and medium sized businesses. The service will consider historical and current complaints against the SME’s bank.This may relate to a number of issues including unfair fees and charges, inappropriate advice or delays which had a negative impact on the business. The service will provide access to an independent review for such businesses which have never had this opportunity previously. The maximum award under the scheme is £600,000. 

Who is involved?

There are currently seven participating banks about whom the BBRS is able to consider complaints. These are:

• Barclays
• Danske Bank
• HSBC
• Lloyds Banking Group (including Lloyds Bank and Bank of Scotland)
• NatWest Group (including Royal Bank of Scotland, NatWest and Ulster Bank Northern Ireland)
• Santander UK plc
• Virgin Money (including Clydesdale Bank and Yorkshire Bank)

It is possible that additional banks might join the service. The BBRS is funded by the participating banks but will be independently operated, managed and governed. 

Which businesses are eligible?

The BBRS will consider historical and current complaints which meet agreed eligibility criteria.  Detailed eligibility criteria are still being finalised and further information will be made available at the end of an ongoing live pilot. Complaints can be raised by different corporate structures, including sole traders, limited companies, partnerships, trusts, charities, and community interest companies. Complaints must be raised by an authorised company representative, including partners or individuals named as a director of the business and may also be raised by guarantors in respect of the guarantee they provided to the business.

Businesses must:

• Be registered in the UK
• Have an unresolved complaint with their bank. Businesses must have complained to their bank within required timescales and given them the opportunity to resolve the dispute 

Some of the other factors that the BBRS will consider when assessing the eligibility of a complaint include the extent to which the subject matter of the complaint:

• Was or is eligible for the Financial Ombudsman Service at the time or has previously been determined by the Financial Ombudsman Service
• Is currently included within court proceedings or has previously been determined by a court
• Was within the scope of a scheme confirmed as independent. The BBRS is still deciding which of the previous bank review schemes it will recognise as independent

The different schemes – historical and current - which applies?

The historical scheme is designed for complaints raised by a business that was previously ineligible for the Financial Ombudsman Service but would be eligible under its expanded scope from 1 April 2019. The historical scheme is therefore for businesses with a complaint against their bank which refers to the period 1 December 2001 to 31 March 2019 where the business has:

• Maximum turnover up to £6.5m per annum and
• Total assets up to £5m

The current scheme will accommodate larger businesses with a complaint against their bank, where the complaint is not eligible for the Financial Ombudsman Service. For the current scheme the complaint needs to refer to the period from 1 April 2019 onwards where the business has:

• Turnover up to £10m per annum and
• Total assets up to £7.5m

Awards 

The BBRS has said it will recommend an award which is fair and reasonable, taking into account all relevant information available. There is a limit to the amount the bank is obliged to pay which depends on the timing of the event in question. These limits are as follows:

• £600,000 for complaints relating to events with a participating bank on or after 1st April 2019
• £350,000 for complaints relating to events with a participating bank between 1st December 2001 and 30th March 2019

The BBRS can actually recommend that the bank pay more than these limits. Whilst the BBRS expects banks to agree to the recommendation where it is above the award limit, the bank is not bound to do so. It will then be up to the business to accept the settlement or contest it further, i.e. through the issue of legal proceedings if required. 

Doyle Clayton’s regulation, investigations and financial services disputes expertise means we are well placed to support our clients with any queries relating to the Business Banking Resolution Service.  

Please contact Charlie Herbert or your usual Doyle Clayton contact to discuss how we can help you.