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 Panel has completed its work on part of its Scope and Methodology Statement which can be found here, and has published guidance notes entitled ‘IAR Fraud and the Causation of Loss’ and ‘Quantifying D & C losses’.
Following discussions between the Panel, LBG, the APPG on Fair Business Banking and the SME Alliance, it has been agreed that the Panel will no longer have to focus solely on the influence or involvement of Quayside Corporate Services and/or its Associates (‘QCS’) when considering whether a Customer was a victim of the IAR fraud. This has the effect of recognising that financial loss may have been caused to Customers by the actions of Lynden Scourfield or Mark Dobson that did not involve convicted individuals from QCS.
The Panel’s approach will, therefore, be to consider the extent to which the actions, inactions or influence of Scourfield or Dobson affected the Customer whether directly or indirectly (including by directing others acting at their behest). For example, the Panel will consider matters such as whether either Scourfield or Dobson agreed to, encouraged, or influenced behaviour or actions that that led to the eventual destruction, demise or other damage to a company placed in the IAR, or caused the company representatives to take evasive action to their own detriment. In doing so the Panel will be able to draw inferences from all the material and circumstances available.
This means that Customers who were admitted into the Customer Review or have since been accepted into it, but whose businesses were not influenced by or had no involvement with QCS, will, if they have opted in to the Re-Review, have their claims for D&C losses considered in the same way as Customers who did have QCS involved in their case.
This widened approach relates only to the Panel’s decision as to which cases may fall within the definition of “the IAR fraud” for the purposes of the Re-Review, as described above.
The definition of the IAR fraud for the purposes of the Re-Review is now as follows (expanded wording is in bold):
“The fraudulent activity perpetrated through the IAR and the company called Quayside Corporate Services Limited (‘QCS’) and/or its Associates, or by Scourfield or Dobson without QCS.”
If the Panel does conclude that a Customer was affected by the IAR fraud, the Panel will still then have to assess whether the Customer suffered losses that they would not otherwise have suffered and, if so, how much.
Sir David Foskett
Chair of the Re-review Panel
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