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As we see it so far (noting that we are still learning more about the BBRS’ shortcomings), there are 5 major problems that the BBRS has:

1. The Independence Problem: The badly compromised governance structure of the BBRS means the directors are not truly independent. That’s a problem because the BBRS was sold to stakeholders as being independent. The participating banks fund it, and as the saying goes “he who pays the piper calls the tune”. The banks also get to “mark their own homework”. So we have a rather bizarre situation where the banks are the judge, jury and proven perpetrator, and as such we feel totally justified in referring to the BBRS’s governance structure as ‘badly compromised’.
   
   

   The participating banks created a company, known as the Bank Appointed Member. It is jointly owned by them and it has the power to block the directors from exercising key powers they would normally be expected to hold. See page nine and the final page of the Articles of Association, here. The BBRS’ supposedly independent leadership team is disinclined to push through change without the approval of the Bank Appointed Member. Furthermore, there are also concerns about the independence of some of the adjudicators because they include former bank employees who sold Interest Rate Hedging Products, which are the basis of many victims’ claims. Are they not therefore obviously conflicted and anything but independent?

2.  The Eligibility Criteria Problem: The lack of independence of the BBRS has led to the Scheme’s Eligibility Criteria being unduly limited, resulting in almost all prospective claims being excluded. UK Finance is reluctant to change the criteria and there is disagreement about whether the Scheme rules are being interpreted correctly. That’s a problem because the extremely low number of cases that have been resolved means the BBRS has not achieved its central purpose  – to resolve a meaningful number of cases. When the BBRS was being established, UK Finance estimated that some 60,000 firms would be within scope for the historical scheme, which in theory deals with legacy misconduct cases such as RBS GRG, HBoS Reading, IRHP mis-selling, Lloyds BSU cases, bank signature forgery cases and more. In fact, with that legacy scheme having been closed to new applications on 14th February 2023, the number of cases resulting in financial awards at the time of writing is currently just 18.
   
   
3. The Trust and Confidence Problem: Trust and confidence between the banks and business has not been restored; if anything it has been worsened. That’s a problem because rebuilding trust and confidence was a central purpose of the BBRS, as expressed by then-Chancellor Philip Hammond. Some believe that the BBRS started off as an authentic, genuine endeavour by the banks to tidy up the many and extensive messes they created and for them to be rehabilitated i.e. to change their ways from the exploitative, predatory, dishonest, devious and profit-regardless-of-the consequences-and-the-carnage-caused entities that they were.

   But others believe the BBRS was never a genuine, authentic effort by the banks. Rather, that it has been something of a “rehabilitation smokescreen” designed to make it look like a fair mechanism had been put in place for businesses to get the compensation they deserved and that the banks were willing and able to undertake a “cultural transfusion” from the exploitative and predatory organisations they were to something honest and ethical.

4. The Consequential Reputational Damage Problem: The abysmal failure of the BBRS to deliver on its purpose is continuing to cause reputational damage to the Government (particularly HM Treasury) and also to the Financial Conduct Authority which is meant to ensure good conduct by the banks. That’s a problem because the Government, HM Treasury and the Financial Conduct Authority are meant to be in charge. The very public ongoing failure of the BBRS is happening on their watch, so it’s not a good look for them that the banks through UK Finance and the BBRS seem to be in the driving seat. Isn’t this a classic case of “the tail wagging the dog?”

5. The Opportunity Cost Problem: Four years and a great deal of money have been largely wasted getting to this point with the BBRS. That’s a problem because in the meantime there has been ongoing suffering for thousands of victims of banking fraud and misconduct. In hindsight, it is now crystal clear that the idea of a statutory tribunals framework would have been a far better approach. Since the BBRS experiment has been tried but failed, the intervention of the Government is now needed to create a route to justice, through a statutory tribunals framework.

These are the headings that we have so far in our submission: 

• Background to the BBRS

• The establishment of the BBRS

• Persistent reasons for concern

• Expectations about the BBRS set by The Chancellor of the Exchequer

• Expectations set by other stakeholders

• What was the role of law firm Osborne Clarke?

• The Discovery of the Bank Appointed Member (BAM) 

• Is the Bank Appointed Member a Person of Significant Control?

• Is the BBRS a distinct enterprise?

• Was the FCA correct to subcontract to the BBRS in the first place?

• What has the BBRS spent?

• What has the BBRS achieved in terms of cases successfully resolved?

• The mysteries of the application of the eligibility criteria

• The problems with Boundary and Concessionary Cases

• Why have there been so many resignations?

• An email trail that shows all is not well

• Has the BBRS handled evidence of criminality in the correct manner?

• The way forward:

• Why giving an expanded remit to the Financial Ombudsman Service would be a disaster; and why the Banks prefer that option

• The merits of independent tribunals 

Are there any topics that you believe should be added to our response?