Cohort of former RBS SME customers win legal backing for £1bn action

The group, known as RGL Management, says the Edinburgh-based bank shut down its members so it could profit from the sale of their assets and will now lodge claims worth more than £1bn after securing legal and financial backing.

RGL Management has gathered claims against RBS over the conduct of its now notorious and defunct Global Restructuring Group (GRG) and the group has secured legal representation from Humphries Kerstetter, which has previously acted for Tesco and WH Smith in a suit against credit card companies.

The legal firm, who have hired barristers led by civil fraud specialist Davenport QC, said: “We are very pleased to have been instructed to represent RGL on such an important claim. From what we have seen, we believe there is potentially a strong case and we intend to move forward with it quickly.”

Claims within RGL Management are expected to exceed £1bn as the group prepares for a marketing push to sign up more firms.

“We believe this has the potential to be a huge claim,” said James Hayward, its RGL’s chief executive. “Single businesses within our group have losses of tens of millions of pounds and thousands of businesses suffered as a result of GRG’s actions. The rate at which we are being contacted by businesses suggests our claim will be very significant.”

Nigel Henderson, an Angus businessman who formerly owned hotels in Montrose and on Skye and who has claimed the bank forced him and his wife’s business to file for bankruptcy in 2001, has joined forces with the RGL through his group, the SME Alliance.

Mr Henderson, who saw an appeal thrown out by the court of session in 2011, said: “RGL has had a very good response to the publicity surrounding its launch in March, signing up potential claimants at an increasing rate whose individual losses range between one or two million to tens of millions of pounds.”

He added: “I am aware that there may be a significant number of businesses adversely affected by RBS and who may not realise that there is the possibility for redress.”

Legal action against RBS is gathering pace even as City regulator the Financial Conduct Authority prepares to publish its report into RBS’s GRG unit, set up to help struggling businesses.

The allegations about GRG gained publicity in 2013 when a former government adviser, Lawrence Tomlinson, published a report arguing the RBS division drove clients to the brink so the bank could buy their properties and make a profit.

An FCA report on Tomlinson’s accusation is expected to be published within weeks.

A spokesman for RBS said the bank will “defend these claims vigorously”.