Via Kristy Dorsey
Scottish companies claiming to have been mis-sold complicated business loans by Clydesdale Bank have heard that they will join hundreds of other SMEs in bringing their case to the High Court in London against the banking community.
The lawsuits relate to “tailored business loans” (TBLs) and fixed-rate loans sold between 2001 and 2012 to customers of the banks of Clydesdale and Yorkshire, when they were still owned by National Australia Bank (NAB).
In the U.K. Banks were sold in 2016 to Virgin Money and are scheduled to be rebranded by the end of next year as Virgin Money. It is reported that the banks wrongly charged termination fees to borrowers who decided to terminate their loans early. It is also reported that, without telling clients in advance, the bank inflated the fixed interest rates payable.
It was decided earlier this month after a case management meeting that the Scottish plaintiffs will enter a class action already pending in England. It is expected that this would facilitate the procedure in the Scottish courts without the need for a simultaneous trial.
The case is being led by Michelmores law firm, RGL Management litigation expert and All Square Financial litigation service provider, who think that more than 6,500 clients have taken out such loans and may have cases worth hundreds of millions of pounds. 509 plaintiffs, including 140 in Scotland, have entered the class action to date.
All Square is looking to step up its attempts to meet the thousands of qualifying firms who have not yet joined, with the case set to go to trial in 2022. “We are pleased that the class action has now passed its first legal milestone,” said CEO Daniel Hall. “However, as the case now moves to trial, we are aware that the window of opportunity to join may soon close.”
He believed that there are probably still “thousands of Clydesdale or Yorkshire Bank business customers who may owe six-figure, possibly seven-figure sums” in relation to TBLs. He added: “In such tense times, we are keen to reach out to the many businesses that don’t know they are eligible to join this case, which is expected to recover hundreds of millions of pounds worth of losses.”
Virgin Money has said it has investigated all of SME’s historical conduct issues and that there is no merit to the allegations.