Our task is to assess and (where applicable) make an award for direct and consequential losses (‘D & C losses’ ) suffered by an eligible customer of Lloyds/HBOS/BOS (‘the Bank’ ) who was a victim of the fraudulent activity perpetrated through the HBOS Impaired Assets London and South East team unit based from Reading and Bishopsgate offices in London (the ‘IAR’) by Lynden Scourfield or Mark Dobson and/or the company called Quayside Corporate Services Limited (‘QCS’), and/or any of its Associates, (the ‘IAR Fraud’ ).
Our objective is to consider any Customer’s case through a non-legalistic and fair process and to make our decisions in a generous, fair and common-sense manner.
We want to complete the process for everyone as quickly as we reasonably can, but we need to balance this objective against the need to give each Customer’s case careful and conscientious consideration.
How does a Customer indicate to the Panel that they want us to assess their D & C losses?
The cut-off date for opting in expired on 4 September 2020. However, it has been extended for eligible Customers in certain specific circumstances. If you do opt in, it is on the basis that you accept the scope and methodology set out on this website and that our decision will be final and binding. It will involve both the Customer and the Bank accepting this in writing. If you have not yet opted in and now intend to do so, please contact us at firstname.lastname@example.org as soon as possible.
We will email Customers about the final cut-off date and publish this on the website once decided. (We have to impose a cut-off date for many practical reasons, including out of fairness to Customers committed to our process).
More than 150 individual Customers have indicated that they wish to opt into the Re-Review process. We have completed an initial prioritisation exercise to determine the order in which the most urgent cases will be considered. Understandably, everyone wants their case dealt with as soon as possible, not least because the fraud occurred so many years ago and Customers want to finally draw a line under it. We understand that fully. However, we also need to take into account, in particular, special circumstances that have been raised with us by Customers, including advanced age, chronic or acute mental ill health, serious physical illness and severe financial distress.
We also have to consider the connectivity between certain Customers’ cases and the appropriateness of assessing them at the same time. There is also the desirability, from our perspective, of considering a reasonable variety of cases in the first ‘batches’ of cases to allow us to develop a better appreciation of the wider picture of the IAR Fraud than we could from considering cases one at a time in isolation. We have now selected the first group of cases, which will include Customers with more urgent special circumstances. We are in the process of contacting Customers in this first group while the information-gathering stage starts in each case.
The Panel is keenly aware that, for some Customers, the thought of yet another ‘process’ may be very unwelcome. We will fully respect Customers’ preferences as to whether, and to what extent, they wish to engage with us at any stage. The process recommended by Sir Ross has been designed to minimise the need for Customer input up to the ‘minded to’ stage (described below) to alleviate the burden on any Customer who would prefer not to play a particularly active part.
The inbuilt flexibility of this style of process allows the Panel discretion to adapt its approach if it feels it necessary to do so in the interests of fairness or efficiency in an individual case. It also allows the Panel to ask for further information or documentation, either from the Customer or the Bank at any stage, and Sir Ross’ recommendations provide a discretion for the Panel to go about this as it sees fit.
This flexible approach should be a positive advantage for all concerned. We very much hope that everyone (Customers, Advisers and the Bank) will co-operate in our inquiries in a constructive and positive spirit.
The Chair of the Panel will write, on behalf of the Panel, to each Customer who has opted in, to introduce the Panel, to explain its overall approach and to invite the Customer personally to make the Panel aware at the outset of any areas of concern or uncertainty that they may have.
In each Customer’s case the Panel will gather information by each of the following various means:
Panel identifies Customer’s previous submissions on D & C losses
At the outset, the Panel will identify the way in which a Customer advanced their D & C losses claim at the time of the Customer Review by reference solely to information/documentation supplied at the time by the Customer or on their behalf. If no submission specific to D & C losses was made at the time, the Customer will not be at a disadvantage in the Re-Review process. The Panel will investigate the Customer’s position.
The Panel has been made aware that some Customers may have information that they consider relevant to the Re-Review process that was not advanced at the time of the Customer Review. The Panel will seek the required information from the Customer at an early stage.
Before any meeting with a Customer takes place, the Panel will review whatever information about D & C losses the Customer has provided.
Panel meets with the Customer, if the Customer wishes
An invitation will be extended to every Customer who opts in to meet the Panel if the Customer wishes. This meeting is by no means an obligatory part of the process for the Customer. We understand that some Customers have told their story many times before and may not wish to do so again. As Sir Ross envisaged, we will meet Customers who choose to do so at an early stage of our information-gathering phase.
The meeting will enable the Customer to say what they wish about their D & C losses, updating the Panel on any new relevant information since receiving their outcome in the Customer Review, and with the benefit of having seen the Panel’s published assessment methodology. The Customer can tell the Panel about any matters which they feel were overlooked or were not dealt with adequately during the Customer Review in light of this and explain the financial effect that the IAR Fraud had upon them. The Panel may take the opportunity to ask questions which will help in assessing the Customer’s case.
At the moment, it is not clear whether this meeting will of necessity be dealt with “virtually” or truly face-to-face. The opportunity for a “virtual” meeting will be offered in any case (even when the current restrictions are lifted to enable an “in person” meeting to occur), and we will be prepared to travel to see a Customer if we reasonably can, where requested. If the Customer would prefer not to have a face-to-face meeting (whether “virtual” or “real”), the Panel will find alternative ways of ensuring that it hears what the Customer wishes to say about the matters mentioned above.
Whether there is a meeting or not, the Panel will be happy to receive any personal accounts in whatever form the Customer wishes to present them. If any Customer gave a statement, particularly a Victim Personal Statement to the police as part of the investigations for the criminal trial, or indeed a statement to the Cranston Review, the Panel will request it in advance of any meeting.
If the Customer would like to be accompanied in a meeting or “virtual” meeting by a “Customer Advocate” (as mentioned by Sir Ross in his final report), they may do so. This can be anyone who the Customer would like to accompany them during the meeting. The Panel recognises that a number of Customers have been supported throughout the long history of this affair by their lawyer. If the Customer would like their lawyer to be their “Customer Advocate”, that is acceptable.
Panel identifies Bank’s previous assessment of D & C losses and the materials that the Bank relied upon
The Panel will identify the reasons given by the Bank for declining to award compensation for D & C losses in the Customer Review. To do so, the Panel will consider the materials contained and referred to in the Customer Review File, including the Bank’s assessment of a Customer’s claim. The Panel will test and evaluate the Bank’s assessment and, where necessary, discuss it and any relevant documents with the Customer.
The Panel has been made aware that some Customers have expressed deep reservations about the completeness and reliability of the Customer Review File. This will be taken into account by the Panel where appropriate, as will the findings of Sir Ross in this respect (see Explanatory notes on the Customer Review File).
If a Customer, in responding to an information request, alerts us to the existence of a document that we are persuaded is potentially relevant and that has not been referred to in the Customer Review File, we will undertake a reasonable, proportionate and focused search of the Bank’s wider archives and database, provided that sufficiently specific search parameters and directions have been provided by the Customer. We will help to formulate and refine the search parameters where it will assist the Customer.
Although we will take account of the assistance received from our advisers, the provisional “minded to” decision will be made by us, and us alone.
We hope that by the time we come to produce our provisional, ‘minded to’ decision, all relevant documents and information will have been identified and considered. If not, the opportunity still exists to challenge our ‘minded to’ decision (as described below).
We will send the Customer and the Bank our provisional, ‘minded to’ decision. This will include a clear explanation of the basis for it and we will attach and cross-reference all the documents on which we have relied in reaching our provisional decision.
The Customer and the Bank will then each have the opportunity to review and respond to the ‘minded to’ decision. The Customer will be able to see the documents together with the Panel’s analysis of them and will have the opportunity to correct any errors or omissions. This will also be the opportunity for the Bank to see any new information gathered by the Panel since the Customer Review and the Panel’s assessment of it.
If both the Customer and the Bank accept the decision, then the ‘minded to’ decision will become our final decision. Ordinarily, but subject to the Panel’s discretion –
If the Customer accepts the decision but the Bank raises objections, we will then give the Customer an opportunity to respond to the Bank’s reasons. That response will be the final submission before the Panel makes the final decision.
If the Customer is dissatisfied with the ‘minded to’ decision, but the Bank accepts it, the Bank will have the opportunity to respond to the Customer’s reasons.
If the Bank is also dissatisfied with the ‘minded to’ decision, the Panel will then give the Customer the right of reply to the Bank’s submission and that again will be the final submission before the Panel makes the final decision.
Sir Ross recognised that the Customer might, after they have received the ‘minded to’ decision, require legal advice. He also recognised that in some cases the provision of financial advice such as forensic accountancy advice might, at that stage, be appropriate at the Panel’s discretion. Our approach will be that if a Customer wishes to obtain legal advice at this stage, they will be entitled to do so. So far as financial advice is concerned at this stage (i.e. once the ‘minded to’ decision has been issued), we will consider requests for assistance of this nature on a case-by-case basis. If we consider it reasonably necessary, we will advise the Bank accordingly that it should fund the reasonable costs of that assistance.
We have provided a fuller explanation of both the rationale for and the process for seeking funding for professional assistance in our separate guidance note ‘Professional advisers and their fees’.
Once the Customer and the Bank have each had the opportunity to challenge or respond to our ‘minded to’ decision, we will then review those submissions and produce our final reasoned decision, having taken all the material and information received to date into account. Again, this decision will be ours and ours alone.
This decision will be final and binding on both the Customer and the Bank.