Customers (directors or de facto directors or persons sufficiently actively involved in running the business or shareholders of corporate customers affected by the IAR Fraud) may apply to have their or their company’s D & C losses assessed by the Panel if any of the following circumstances apply:
In all cases where a settlement agreement has been entered into between the Customer and the Bank, the Bank has notified us that you will be required to enter a release agreement with the Bank covering the terms of your Opt-in to the Re-review, including release from the relevant provisions of your Settlement Agreement.
If you have not yet been accepted as having been eligible for the Customer Review under category (e), we understand you can still apply to the Bank to have your eligibility re-assessed. Rory Phillips QC is considering appeals from this process (a link to his website is here).
As indicated above, the Bank has notified us that any ‘new’ Customer (e.g. as a result of a revised eligibility assessment or other late entry) will have to accept their award or settlement offer from the Bank other than for D & C losses (e.g. for Distress & Inconvenience) before they may opt in to the Re-Review Panel. The Bank has confirmed that it will not conduct any assessment of D & C losses for ‘new’ Customers. This means that once they have settled with the Bank in other respects, they will be directed to the Re-Review Panel if they want their D & C losses assessed.
Customers who have outstanding claims (other than for D & C losses) with the Bank who intend to opt in to the Re-Review process should let us know once they have resolved those claims with the Bank. This will enable the Panel to ensure that Customers in that category are not excluded from the Re-Review by the cut-off date for opting in that will be set in due course.
If you are uncertain about whether you can apply to the Panel, please send your query to firstname.lastname@example.org and we will help you.
A detailed overview of the Foskett Panel’s approach to professional advisers and their fees throughout the Re-Review can be found here.
Following meetings between the Panel, LBG, the APPG on Fair Business Banking and the SME Alliance in March 2021, the following arrangements have now been agreed to deal with professional fees (for legal advisers and/or financial experts) that are proposed to be incurred by a Customer during the information-gathering stage of the Re-Review so that these can be paid by LBG.
This new arrangement means:
The Panel wish to emphasise that the Re-Review process has been designed, following Sir Ross Cranston’s recommendation to this effect, in a way that lawyers and/or financial experts are not essential during the information gathering stage.
The Panel remain confident that, with the assistance of their own team of advisers, they can assess a Customer’s case for D&C losses without the assistance of lawyers and/or financial experts during the information gathering stage. No Customer should feel obliged to engage such assistance.
Where professional support is relied upon, if what is intended is simply a repetition of the submission that the Customer made to the Customer Review (to which the Panel will have access within the Customer’s file), no further fees would be payable in relation to that work. This includes any material prepared by a forensic accountant or other financial expert (such as a valuer) on behalf of a Customer during the Customer Review.
The Panel sees no need for any repetition of that work and do not anticipate receiving a fully re-worked new claim.
So far as fees of lawyers are concerned, Sir Ross Cranston made it clear that “[only] costs incurred by qualified, practising lawyers will be met”. The fees of Claims Management Companies or other unqualified advisers for this work will not be recommended for payment by LBG in any circumstances. Financial advisers must also be suitably qualified.
In those cases where a professional adviser is instructed at this stage, it will be a requirement that the Customer also provides written confirmation that they have requested the advice/representation.
The process for Peter Hurst (‘PTH’) to decide on the payment of professional fees is as follows:
The proposed fees for any professional services that you wish LBG to meet the cost of should, if possible, be approved in advance of work being undertaken. Any Customer who has already instructed professional advisers or who is contemplating doing so should make initial contact with Peter Hurst to alert him to their position.
A Customer may engage their lawyer to act as a “Customer Advocate” at any meeting as a supportive companion, but also, where the Customer would like it, to act as their advocate at that meeting to relay the Customer’s personal account to the Panel on their behalf. We regard the role of the lawyer in this capacity as distinct from the role of a lawyer who makes submissions on a Customer’s behalf. The (relatively modest) fees for a lawyer acting as a Customer Advocate would be met by the Bank. Please contact email@example.com for more information.
Sir Ross recognised that a Customer might, at the stage of reviewing the ‘minded to’ decision, require legal advice. Any Customer who wishes to obtain legal advice after receiving the MTD will be entitled to do so and the reasonable fees for this will be funded by the Bank.
PTH will determine the scope of the work and the appropriate level of fees, but he will not have to determine whether the work is ‘reasonably necessary’.
In order for PTH to approve the level of legal fees after the MTD, please contact firstname.lastname@example.org indicating:
PTH will review this information and notify the Customer and the Customer’s advisers and LBG of his provisional view and invite any comment. He will take into account any comments and his decision thereafter will be final.
The proposed fees should, if possible, be approved in advance of work being undertaken.
Sir Ross had recognised that in some cases the provision of financial advice such as forensic accountancy advice after MTD “might be appropriate at the Panel’s discretion”. However, Customers who did not use the services of a financial expert at the time of the Customer Review, or who do not do so during the Panel’s information gathering stage, will not be disadvantaged. The Panel emphasises that:
This means that every Customer who applies to the Panel can be assured that the Panel will consider the approach that a forensic accountant/valuer independently instructed by a Customer would bring to the claim. The Panel will assess the D & C losses on the basis both of optimistic assumptions about what would or might have happened to the business without the fraudulent activity, as well as more conservative assumptions, in order to reach a balanced view.
As a result, the Panel is confident that a Customer who does not have a forensic accountant or other financial expert helping them will not be disadvantaged.
Where, however, support for the costs of any financial advice is applied for by a Customer, it will be considered by PTH.
In order for PTH to approve the level of fees for financial expertise after the MTD, please contact email@example.com indicating:
He will make a provisional decision on the nature and scope of the work, the hourly rate and the total fees payable. He will notify the Customer and the Customer’s advisers and LBG of his provisional view and invite any comment. He will take into account any comments and his decision thereafter will be final. The proposed fees should, if possible, be approved in advance of work being undertaken.