Sir David Foskett has been appointed to chair the independent Re-Review Panel (also known as the Foskett Panel) to reassess the direct and consequential (‘D & C’) losses suffered by victims of the fraud committed at the ‘HBOS Impaired Assets unit based at Reading and Bishopsgate (‘IAR’)’. Sir David is joined on the independent Panel by Philippa Hill and Andrew Hildebrand.
The work of the Panel arises from the conclusions of Sir Ross Cranston’s report, known as ‘The Cranston Review’, published in December 2019. The Cranston Review concluded that the way Lloyds Bank had dealt with D & C claims in its original Customer Review was unsatisfactory and did not achieve the purpose of delivering fair and reasonable offers of compensation. He recommended that the process of assessing direct and consequential losses should be carried out again, but this time in a fair and proper manner. In a second report, published in April 2020, he suggested how the reassessment exercise might be carried out.
The changes to the Re-Review process referred in our updates in June and July are now ‘live’.
These new arrangements are based on the discussions with the APPG on Fair Business Banking, the SME Alliance and the Bank undertaken over several months. They are designed to speed up the overall Re-Review process for all Customers and improve their experience during their involvement in it.
As you will be aware from our previous updates, the changes that are now ‘live’ include:
The introduction of Victim Status Decisions (‘VSD’) in cases where we are able to determine that an individual Customer was a victim of the IAR Fraud (as defined here. The Bank will be able to challenge these decisions only on the basis of an obvious error on the face of the decision itself. They will not be able to challenge the merits of the decision.
Please note that not every Customer will receive a VSD. We must be able to conclude that a Customer was potentially affected by the fraudulent actions of the fraudsters. As Sir Ross Cranston explained, this was not the case for every Customer who went through the Customer Review. Where on the information we have been able to obtain (including information from the Customer), we still cannot issue a VSD, we will issue a ‘Minded-to’ Decision (‘MTD’) recording our provisional view on victim status. This will then be open to challenge by the Customer.
The Fixed Sum Award (‘FSA’) option will now be available to Customers who receive a VSD. It will mean choosing between (i) remaining in the Re-Review and our undertaking a detailed analysis of the Customer’s D&C losses (if any) OR (ii) accepting the FSA of £3million net of tax and exiting the Re-Review within a short period thereafter. Customers who receive a VSD will have a one-month decision window in which to notify us of their choice.
Please read our new guidance on the FSA for more information.
An increase in the interim payment a Customer may receive following a ‘minded-to’ decision to 40% of the award proposed in the MTD if we are able to conclude that quantifiable financial loses for the Customer arose.
Please read our new guidance on interim payments for more information.
Changes to the arrangements for professional fees with £15,000 being available without prior approval from Peter Hurst.
Please read our guidance on professional fees for more information.
The above summarises the main changes to the Re-Review process, but we encourage all Customers and professional advisers to read through the revised website.
In particular, please consider the FAQs, which have been updated following the changes, and cover a number of important topics.
We are continuing to work through cases in priority order, which means continuing to work on the most urgent cases, taking into account serious physical illness, chronic or acute mental ill health, severe financial distress and advanced age, first. We ask to always be kept updated if there are any changes to your personal circumstances.
As explained in our last update, there will not be an immediate block issue of VSDs and the Panel will be in contact with Customers before we issue any decisions.
We again would like to emphasise that there is no need for Customers or their representatives to contact the Panel beforehand. We will keep Customers updated as we make progress with the new arrangements.
We do wish to assure everyone that we and our teams are working through the outstanding cases just as quickly as we can. For reasons we have given in previous updates, the whole process to date has been more complex and time-consuming than originally anticipated. However, we believe that the new arrangements can make a significant difference to the pace of the Re-Review. We do ask for the cooperation of all Customers and their advisers when their case comes to be considered and for their continued patience whilst progress with the new arrangements is made.
After the new process is live and in full operation, we will provide regular updates on progress. In our update in June, we said that Customers would be told the details of the new arrangements “before any of the changes has a practical impact on them” and that remains the position.
For the FAQ videos referenced in the above update, please click here.
If you have any questions or comments in the meantime, please contact firstname.lastname@example.org.