Our Chair Lewis Shand Smith on delivering the Business Banking Resolution Service.
“Was it cold clear logic that made you weep today, Sir Robert…?”.
Some years ago, I played barrister Sir Robert Morton in Terence Rattigan’s play, ‘The Winslow Boy’. It’s the story of a famous dispute over a five-shilling postal order. After a debate In the House of Commons the case is heard in court. Following a not-guilty verdict the normally aloof and cold Sir Robert is seen to weep:
“I wept today because right had been done.”
“No. Not justice. Right. It is not hard to do justice – very hard to do right.”
And that is the challenge facing the Business Banking Resolution Service (the BBRS).
The BBRS was established by seven of the major lending banks to deal with unresolved disputes with their Small and Medium Enterprise (SME) business customers. It has two separate responsibilities. The first is to seek resolution for historical complaints which could go back to 20011. The second will take current complaints from larger companies2. These companies will no longer have to resort to formal litigation if they have a dispute with their lender. Instead, they can register to have the BBRS consider their case. The adjudication team will seek to find a resolution in the most appropriate way and as quickly as possible. Importantly, decisions will be made on the basis of what is fair and reasonable in the circumstances, taking into account regulation, law, and codes of conduct.
Any redress will attempt to put the complainant back to the position they were in had nothing gone wrong. If that’s not possible we will seek to find the best acceptable solution. In many, perhaps most cases, the BBRS will not be working with indisputable facts, nor applying cold clear logic, but with stories and narratives that will be listened to with empathy and considered carefully. It is our task to weigh up the evidence and reach a conclusion by which right has been done.
No-one is unaffected by the destruction caused by covid-19. The human cost is a tragedy on a scale few of us have ever experienced. We know too that there is an economic and financial cost, immediate and long term. National economies are in danger, and we are already feeling the effects on individuals and businesses. In the UK there are estimated to be 5.9 million SMEs3. Governments, and lenders are working together to provide them with emergency loans and grants. The banks are attempting to process large numbers of loan applications, but they are hampered by significantly reduced staff numbers.
For this to work, businesses must have trust in their lenders. Following the financial crash in 2008 that trust was severely damaged. The BBRS has an important part to play in rebuilding trust by offering a safety net where something may have gone wrong. The service is free, and removes the cost, the stress and the risk of going to court. Although we are a young organisation, we have already invited businesses to register their interest in using our service. We have started to hear complaints in a pilot designed to test our policies and procedures.
In setting up the BBRS we always knew our service would be important should there be another financial crisis. No one expected it to happen this soon, nor as a result of something as shocking as covid-19. The longer the lockdown, the greater the damage to our businesses and the economy. As we re-emerge, the BBRS is poised to play its part in supporting a recovering business community, and to see that right is, and has been, done.
Lewis Shand Smith
1 Until 1st April last year only micro-businesses were eligible to use the Financial Ombudsman Service. Since then the FOS has been able to look at complaints from companies with an annual turnover of up to £6.5m and a balance sheet of up to £5m. The BBRS historical scheme mirrors that change, and provides an opportunity for businesses of that size, with disputes dating back to the 1st December 2001, to have their cases heard.
2 Those which had an annual turnover of between £6.5m and £10m and assets of no more than £7.5m at the time of the complaint.
3 House of Commons Briefing Paper 06152, December 2019