RBS’s Global Restructuring Group’s (“GRG’s”) supposed objective was to improve both RBS’ position and its customers’ position when the customer was in financial distress. It purported to have two objectives: to return customers to financial health and protect RBS’ position by minimising losses and maximising recoveries.

GRG’s intention was to allow a lending structure but within the confines of an ability to close the borrower down if it was irredeemably insolvent.

Since 2008 there is evidence (and now substantial and multiple litigations against RBS) to suggest that a significant number of businesses end up in a worse position at the end of their GRG experience than when they entered GRG despite promises of support to help to improve cash-flow and return the business to mainstream banking.

It is now suggested that the removal of loans from RBS’ balance sheet and the imposition of significant fees on businesses has helped to substantially improve the bank’s liquidity and increase its profitable activities.

Investigations and report to date

The activities of GRG have been the subject of scrutiny in a number of well-publicised reports including reports by Dr Lawrence Tomlinson and Sir Andrew Large. 

Clifford Chance conducted an urgent review on behalf of the Bank. Their April 2014 report was heavily criticised and has been described as a “white wash”.

The Financial Conduct Authority (“FCA”) instigated an investigation into GRG in January 2014. The publication of its report, known as a “s.166 Investigation” has been delayed several times and now expected by mid 2016, 2.5 years after the FCA’s commenced its investigation. It is still unclear when the report will be released and whether a compensation scheme will be set up.

What can/ will the FCA do?

It is possible that claimants may ask for the FCA to put in place a compensation “scheme” (similar to that in relation to the Interest Rate Hedging Product/SWAP Review) for dealing with particular cases. This may help potential claimants to overcome limitation issues and the need for the resolution of complex and intricate legal issues.

If the FCA recommends a redress scheme should be put into place for GRG customers, whether it represents a fair redress scheme for ex-GRG customers would largely depend on the scope of the scheme, who will be included and what level of damages the scheme would be able to pay out.

I am hopeful that the bank has learnt lessons from the criticisms of the IRHP scheme and that if a GRG scheme is to be setup; it would be wide enough to encompass all those who have a genuine complaint against GRG.

However, the FCA has no powers with which to force RBS to undertake a review and pay damages. The relationship with its customers is unregulated.  It may therefore be that a voluntary scheme similar to the Tailored Business Loan Agreement Scheme, which relates to Clydesdale Bank, will be created.

It is hoped that RBS is taking steps to make provision in its accounts to compensate GRG customers affected and caught by a potential redress scheme. However, there are currently no guarantees that any compensation scheme will be made available. Therefore if business owners intend to seek compensation, they may need to consider litigation through the civil courts.

West Register

RBS has been accused of selling customer assets to one of its subsidiaries or for subsidiaries to be paid large fees, or in some cases be given an equity stake in the customer’s business.

RBS has always owned subsidiary companies that hold assets taken from insolvent customers. If, for example, a business owned a substantial building and became insolvent, the bank might keep the building it had been pledged as security, with a view to selling it when property prices increased. 

These companies were formerly and collectively known as “West Register”, a group of wholly owned bank subsidiaries. West Register is a branch of GRG.

West Register companies are not regulated by the FCA and the FCA has no powers to even recommend anything to them, let alone impose a scheme although it is anticipated that GRG’s relationship with West Register and fees obtained by West Register from GRG customers will be criticised in the report.

If you had assets that were sold to a West Register company, or in GRG you had assets which you believe were sold at a substantial under-value and know the name of the company that acquired your assets, or you agreed a Property Participation Fee Agreement in favour of a company, especially a West Register or SIG company, you can use Oratto to get in touch with the right banking and finance lawyer for you. They would be happy to discuss this with you further.


Prospective Claimants who may have claims against the Bank are limited in how long they have to commence proceedings. If this “limitation date” passes, prospective Claimants are prevented from issuing Court proceedings and may lose their right of action against the Bank. It is likely that a number of customers will have limitation dates that expire before the report is released and so the delay is likely to cause severe prejudice to a number of ex-GRG customers.

We therefore hope that customers who may not have a route through the court system due to limitation would also be able to access redress via a redress scheme. However, as no current scheme is set up we recommend that all those affected by these issues consult legal advisors immediately to examine the facts and circumstances of their complaint, to identify what potential claims they have and to establish when the limitation date occurs.

Prospective Claimants should consider their options now to ensure they are not prohibited from later bringing a claim against the Bank if the s.166 Investigation does not provide an adequate compensation scheme.

Beyond RBS

My colleagues and I have acted for a number of businesses who have experienced similar issues amongst ex-customers of Barclays Business Support, Lloyds’ Business Support Unit (“BSU”) and other major banks “Specialist Turnaround Divisions” and well as acting for many current or ex RBS customers who were placed into GRG.


If you are a customer or ex-customer of any of the banks’ “Specialist Turnaround Divisions” and are concerned about how your business has been treated, you can discuss the matter with an Oratto member lawyer. 

Even in the event that a compensation scheme is created (which if created would only apply to RBS and Natwest GRG customers), it is vital for prospective Claimants to have a detailed review carried out to assess their evidence and the merits of any such claim, regardless of whether or not the prospective Claimants intends to seek redress through a review process or through the courts.