Fifty small businesses are to bring claims worth more than £1bn against Royal Bank of Scotland (RBS) after saying that the bank pushed them into bankruptcy for their own profit.
RBS set up the now defunct Global Restructuring Group (GRG) unit to help struggling businesses.
According to The Guardian, 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.
RGL Management, which is helping the claimants, was set up specifically to manage and pursue claims against RBS in respect of the conduct of GRG. The claimants will have legal representation from Humphries Kerstetter, which has previously acted for Tesco and WH Smith in a suit against credit card companies.
“We believe this has the potential to be a huge claim,” said James Hayward, a lawyer and investment banker and the chief executive of RGL.
“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.”
RGL Management said it was looking to swell the ranks of former GRG clients seeking redress before a courtroom fight that was likely to be met by a fierce defence from RBS.
“This is about making people realise that there is a vehicle through which they can claim,” said Hayward. “We are funded, we have lawyers ready, we’re investigating and processing data and if people think they have an issue they should come and talk to us.”