A glossary of defined terms used in these FAQs can be found here.
No. The cut-off date for opting in was 4 September 2020 and the Re-review is now officially closed to new applicants. To have opted-in you must have completed the process by signing an agreement with the Bank to state your acceptance of our processes including that the Panel’s decision will be final and binding on both the Customer and the Bank.
We had to impose a cut-off date for many practical reasons and out of fairness to Customers already committed to our process. If extenuating circumstances prevented you from opting-in before the cut-off date but you now wish to do so, please contact us at email@example.com as soon as possible to explain your situation.Back To Top
Yes, if you have opted-in to the Re-Review process. Some Customers did not advance a claim for D&C loss during the Customer Review and may now have information that they consider relevant to the Re-Review process that was not advanced at the time of the Customer Review. If you tell us that this is so, we will seek the required information from you at an early stage in our information-gathering stage.Back To Top
You will have an opportunity to present any new factual information in the information-gathering stage. The Panel’s Case Managers will ask Customers about any further information they may have during the information-gathering stage so we can plan how best to receive the information. Please do not contact the Panel with such information before hearing from a Case Manager.Back To Top
We recognise that some Customers may not hold all the documentation relevant to their claim for D & C losses. We will endeavour to find any relevant documentation that we reasonably can. We understand that, in the circumstances, some documentation may be missing or may misrepresent the true position.
The more information that is available, the more likely it is that we will be able to quantify any D&C loss suffered. A list of the types of information that would be useful where available can be found here. However, simply because documentation that supports a claim cannot be found does not necessarily mean that the claim cannot succeed. We will try to obtain a full understanding of the position before we reach a decision.Back To Top
When we issue our 'minded-to' decision. At that time, we will include all the documents that we have relied on in reaching our provisional decision. This will include documents held by the Bank. The Customer can then make any comment about these documents that they wish to if they decide to challenge the Panel’s Minded to Decision.Back To Top
We (the Panel) are entirely independent and we alone will make the final decision in every case. The Bank, like the Customer, will have the right to review and respond to our ‘minded to’ decision and we will consider all the material and submissions before reaching our final decision.Back To Top
Some Customers expressed deep reservations about the completeness and reliability of documents in the Customer Review File. Sir Ross Cranston also highlighted the importance of taking into account the potential impact of the fraudulent activity on the documentary materials available. The Panel are very alive to the need for caution in this respect. We will take all this into account wherever we consider it appropriate. We may on occasion discuss key documents with a Customer in the information-gathering stage or highlight where documents appear to be missing to allow the Customer to comment if they can. If the Customer considers a document relied upon by us is misleading or fraudulent, and for some reason this has not been identified in the information-gathering stage, the Customer may refer to the document in their challenge to the 'minded-to' decision and explain their position at that stage. Any final decision will take into account the Customer’s views on the documents relied upon by us.Back To Top
No. If you do not wish to submit any further information or meet with us, you will not be obliged to do so. Specifically, no negative inference will be drawn if a Customer chooses not to meet with the Panel or a Case Manager. We recognise that going over the story again may be distressing and we will do what we can to make it comfortable for Customers.
We will not be offended if a Customer chooses not to engage in person. If we consider it necessary for the Panel or a Case Manager to meet a Customer, we will ask that Customer.Back To Top
Yes.Back To Top
As a bankrupt or former bankrupt, the Panel will consider your claim for D&C losses.
The position of a victim of the IAR Fraud who has been made bankrupt and who chooses the fixed sum award option is complex. Certain considerations will apply. Please find that information here.Back To Top
No. We can only consider a D&C loss claim.Back To Top
No. No financial limits have been set on any award we can make for a D&C loss.Back To Top
The Bank, like the Customer, has the right to review and respond to our ‘minded to’ decision and we will consider all the material and submissions before reaching our Final Decision. The final decision will be final and binding on the Bank as well as the Customer.Back To Top
The Panel has published the definition of a victim of the IAR Fraud here. It has also published the definition of the IAR Fraud.
The Panel will consider whether or not a Customer is a victim by reference to these definitions.Back To Top
No, it is not.
The definition was agreed during discussions between the Panel, the APPG on Fair Business Banking, the SME Alliance and the Bank. The definition does not in any way reduce the ambit of Victim Status – indeed, if anything, the definition is wider than the way in which Victim Status was considered previously.
The definition refers to the potential loss rather than to the actual loss for a Customer affected by the fraud. This may well have the effect of widening the group of Customers who have the option of choosing the Fixed Sum Award.
It should also be noted that LBG now has a very limited right to challenge our decision on victim status which is different from the previous position.Back To Top
The Panel will issue a Victim Status Decision only if it reaches the stage in its investigation of a Customer’s case when it can conclude that the Customer was a victim of the IAR Fraud.
This point may be reached at any point during consideration of a Customer’s case. Some cases require more investigation than others to enable the Panel to reach a conclusion on victim status.
If following the Panel’s initial investigation they are unable to conclude on the information available that the Customer was a victim of the IAR Fraud, they will complete the information-gathering stage in the usual way, including a meeting if the Customer wishes it. If the Panel still cannot conclude that the Customer was a victim of the fraud, they will then issue a 'minded-to' decision setting out its reasoning. The Customer will have the opportunity to challenge this conclusion and the Panel will consider the position again in the light of the Customer’s challenge
In cases where the Panel is not able to conclude the Customer was a victim, the decision is only provisional until a Final Decision is issued.Back To Top
Yes, it does.
When a Customer’s claim remains in the Re-Review, the right to challenge an MTD will arise in two potential situations:
In those cases there will be a full opportunity to challenge the provisional conclusions reached if you wish to do so. This is as Sir Ross Cranston recommended.
What we have found in our work so far is that, in almost every case, a Customer has brought forward new information after we have issued an MTD and (in some cases) new claims which could have been raised with us beforehand. This has occurred even when the Customer has had professional advisers working for them in the earlier stages of our investigations. This has meant that we and our teams have had to revisit the issues in those cases, thus delaying the outcome for the individual Customer and delaying us in getting on with the claims of other Customers.
Our guidance is designed to highlight this problem and to encourage Customers (who will have the benefit of engagement with our Case Managers) to bring forward material information before the MTD. Where they do not, we will want to understand why.
On the basis of our work so far, we have also thought it sensible and helpful to all Customers to offer some guidance on (i) what is likely to be a more persuasive challenge than some generalised challenge and (ii) challenges to our judgment on the chances of a particular counterfactual scenario materialising for a Customer.Back To Top
The way we will approach the victim status assessment is set out here.Back To Top
The Panel’s conclusion on victim status excludes any consideration of actual financial loss.
If you choose to stay in the Re-review, the Panel will then investigate whether or not financial loss was in fact suffered as a result of the IAR Fraud and, if so, whether that can be quantified. The Panel may conclude that, even though you were a victim of the IAR Fraud you suffered no loss; for example, if it is not possible for the Panel to conclude that your position would have been different in the absence of the fraud.Back To Top
The sum is fixed and is the same for each Customer to whom it is offered.Back To Top
No. The Fixed Sum Award is a one off, time limited option. After the end of the decision window the option to accept the Fixed Sum Award will no longer be available.Back To Top
The Panel refers you to the Guidance given to Customers offered the Fixed Sum Option.Back To Top
The Causation of Loss and Quantifying D&C Losses
We must first conclude that you were a victim of the IAR Fraud, and that the IAR Fraud caused financial loss to you and that financial loss is capable of being quantified based on the available information.
Our approach to assessing D & C losses as a result of the IAR Fraud is explained in the section ‘Our Assessment Methodology’.Back To Top
The Re-Review is different from a court process in a number of ways including the following:
The Panel uses these words “fair and generous” with their everyday meaning and not in any technical way.
The Panel will aim to ensure the process used to calculate the D & C losses, and any award which is made for those losses, is fair. This means that the process will be transparent and reasoned. Every case will be unique and considered on its own facts, but the Panel will aim to ensure, so far as possible, a consistency of approach to all Customers’ claims. Explanations will be provided for why decisions have been reached and the Customer will be able to review and comment on all the documents relied upon in coming to a 'minded-to' decision.
In respect of the award itself, the Panel will aim to ensure that any financial losses suffered by a Customer are fully compensated and the Panel will approach the review generously in respect of each Customer.
The Panel is not bound by strict legal precedent and will approach its task in line with its overriding objective.
The Panel will assess all the evidence as a whole, including your account of what occurred.Back To Top
You may have received compensation for ‘Distress and Inconvenience’ from the Bank in the Customer Review. That was intended to compensate a Customer who had suffered distress and inconvenience, irrespective of whether they had also suffered financial losses as a result of the IAR Fraud. Sir Ross commented in ‘The Cranston Review’ that the Bank extended redress under this heading to include Customers who had not necessarily been victims of the IAR Fraud, but who had been victims of what he called “bad or aggressive banking practices.”
Compensating for “bad or aggressive banking practices” is not within our remit. The D&C losses assessment by the Panel will be made independently of any prior assessment that may have made for Distress and Inconvenience by the Bank.Back To Top
The Panel’s scope in the Re-Review is to assess and award compensation for individuals who suffered financial losses as a result of the IAR Fraud. Any compensation that the Panel decides to award will be for that reason only, irrespective of whether that customer was also affected by aggressive or bad banking practices.Back To Top
We will be looking at each Customer’s case afresh. We will not be making any assumptions or presumptions, one way or the other. We will not assume that your Company was in a poor financial position or that it had no prospects simply because it was put into the IAR.Back To Top
You will never be required to return any amount of compensation you have already received from the Bank as a result of our Re-review. Our process is only intended to assess whether you should receive any additional compensation and, if so, how much. We may have to make certain deductions, and this is explained in our Quantifying D&C loss section.Back To Top
Yes - subject to the agreement that you may have reached with LBG in order to opt-in to the Re-Review, as regards D&C losses arising from the IAR Fraud.
If you have chosen to opt into the Re-Review, it will be on the basis that you accept the Scope and Methodology Statement set out on this website and that you also accept that our decision regarding D&C losses will be final and binding.
The Panel is not in a position to advise you about any other potential claims that might be brought against the Bank.Back To Top
This depends on the circumstances. Please see our explanatory notes about the approach to compensation for D&C losses and the role of the Trustee in Bankruptcy where a Customer has been or is currently subject to a bankruptcy Order.Back To Top
Professional advisers and their fees
Customers can instruct lawyers at any stage in the Re-Review process, but the circumstances in which the Bank will be obliged to pay the reasonable costs are explained on the page ‘Professional advisers and their fees’.Back To Top
A Customer may deploy forensic accountancy expertise and advice if they wish during the Re-Review process, but the circumstances in which the Bank will be required to pay the reasonable costs are more restricted than for legal advice and is explained on the page ‘Professional advisers and their fees’.Back To Top
No. Provided the fees are within the £15,000 plus VAT pre-approved limit you can engage advisers to support you at any time without giving prior notice to LBG or Peter Hurst.
However, we strongly recommend that you wait to hear from us or our team before starting to incur any fees. This is because you may use up your £15,000 plus VAT pre-approved limit on professional fees that are not reasonably necessary (see link here to the professional fees guidance on what is reasonably necessary), and if that is the case you will risk not being able to claim funding for future professional costs if these exceed the £15,000 limit.
You are advised to wait to see our analysis in the MTD before requesting funding for professional assistance to prepare a targeted response to the points that you wish to challenge in the MTD. Our experience shows this will also result in a faster outcome in your case and all reasonable costs of doing so will be fully funded by LBG.Back To Top
Unless specifically requested by us, preparing submissions on victim status is not regarded as reasonably necessary pre-MTD and the costs of such advice will be deducted from any future claim for professional fees exceeding the £15,000 pre-approved limit.
If we already have enough information to conclude that a Customer was a victim and we issue a Victim Status Decision to that effect, you will then have a £10,000 (plus VAT) allowance to cover professional costs of advice specifically to assist you in deciding whether to accept the Fixed Sum Award as explained in the guidance here.
This is separate from the £15,000 plus VAT which is for professional costs of supporting you to provide information to us in the Re-Review.
Our consideration of Victim Status is part of the pre-MTD information-gathering stage and the normal policy for the funding of professional fees applies, including what is regarded as reasonably necessary (see policy and guidance here).
If we are not able to conclude that you were a victim, you will receive a MTD which will set out our reasons and include all the relevant documents. You can then obtain funding for all reasonable professional fees to assist with your response and challenge to the MTD.Back To Top
No. There is one pre-approved limit of £15,000 plus VAT per Customer in the Re-Review – this applies to the whole period of the Re-Review, both before a Victim Status Decision (if one is issued at all) and afterwards (where a Customer remains in the Re-Review).Back To Top
No. These are two different forms of funding for two different activities. The £10,000 plus VAT allowance is purely for professional advice and expenses incurred in the decision-window. It is not transferable.
However, if you remain in the Re-Review all of your reasonable costs of professional support to respond to our MTD will be funded by LBG.
Please note, however, that these must be requested in advance if they exceed the £15,000 pre-approved limit.Back To Top
You can claim these costs retrospectively by emailing firstname.lastname@example.org, attaching a copy of the full itemised invoices from your advisers for costs up to £15,000 plus VAT.
However, any costs exceeding this amount will need to have been approved in advance by PTH, as no retrospective funding will be given by LBG.Back To Top
Any such excess fees charged by a professional adviser will not be recoverable from LBG and will be a cost borne by the Customer. It is, therefore, very important for Customers to ensure their advisers accept that they must not exceed pre-approved limits or estimates. Advisers should keep detailed records of costs incurred and monitor costs closely to avoid risks of non-recovery of costs.Back To Top
The Panel’s remit does not extend to considering any claim for professional costs incurred outside the Re-Review process itself, subject only to the following exception.
If you are assessed by the Panel to have been a victim of the IAR Fraud and you then choose not to accept the Fixed Sum Award, you may claim, as a separate head of D&C loss, for such professional costs as were incurred at an earlier stage and which arose as a result of the IAR Fraud. If you do so, Peter Hurst will advise the Panel whether any costs claimed in this way are reasonable and, if not, what a reasonable level of fees would be. The Panel will issue its Minded to Decision (‘MTD’) on all aspects of your loss, if any, which LBG will be entitled to challenge if it wishes. The Panel will then make a Final Decision (‘FD’) on all aspects of your loss, if any.
Please note, however, that if you are assessed to have been a victim of the IAR Fraud and you accept the Fixed Sum Award, the Panel cannot look into the question of what losses, including any professional costs incurred, you may have sustained as a result of the IAR Fraud.
The position on this point is the same whether you are subject to the new arrangements that began on 3 August 2022 or you are a “transitional customer”.Back To Top