In this feature, Lawyer Monthly hears from Alexandra Marks on the purpose of the BBRS and the organisations that may find its service relevant.
What issues were identified by the Simon Walker Review that prompted the founding of the Business Banking Resolution Service (BBRS)?
Walker conducted a comprehensive analysis of the scale and complexity of banking complaints from SMEs, particularly in the wake of the 2008-09 financial crisis. His Review was published in 2018 and focused on disputes that remain unresolved despite the SME raising a complaint with their bank yet may be unsuitable for court processes.
Walker found that there was no evidence of “systemic malpractice” by banks during the crisis. However, he stated that “individuals and units within certain banks, responded to the crisis in an ad hoc manner which was sometimes unreasonable and panicked, occasionally reprehensible, and almost always distressing for those affected.”
Walker made a number of recommendations on how to move forward, with particular emphasis given to the need for complaints to be reviewed on the basis of what is fair and reasonable in the circumstances. This is due in part to the fact that courts have often found banks not to have acted unlawfully.
In response to the Walker Review, the seven UK banks operating in this market agreed four proposals. The creation of the BBRS addresses points two, three and four:
- Support for the extension of the Financial Ombudsman Service to cover businesses with turnover of up to £6.5 million;
- Access to an appropriate ombudsman scheme for SMEs with turnover of between £6.5 million and £10 million and a balance sheet up to £7.5 million;
- The creation of a voluntary business banking ombudsman scheme for eligible historic cases;
- The creation of an independent and transparent advisory council with the ability to consider emerging trends and issues regarding access to finance, the treatment of SME customers by financial services providers and the provision of appropriate support to SMEs to ensure there is an ongoing dialogue to address potential challenges early and effectively.
Could you summarise what services the BBRS provides and what makes a business eligible to receive them?
The BBRS has been designed by the seven participating banks, in partnership with SMEs and UK Finance, to meet small businesses’ needs in seeking to resolve disputes with their banks. We offer an alternative to litigation, removing the cost and stress of going to court for SMEs. My judicial experience has shown me that the fabled ‘day in court’ is often a disappointment for parties hoping to tell their story. We offer a much richer opportunity for individuals to give their account in their own words, which we believe can offer a better route to closure.
The BBRS has two schemes: one for contemporary cases and one for historical cases, with slightly different eligibility criteria. Broadly speaking, we are able to assist UK-registered businesses, trusts, charities, friendly societies and co-operative societies which have an unresolved complaint against one of the banks participating in the BBRS. A customer must first have complained to their bank and given them the opportunity to resolve the issue prior to bringing it to the BBRS.
My judicial experience has shown me that the fabled ‘day in court’ is often a disappointment for parties hoping to tell their story.
Our contemporary scheme covers cases for the period from 1 April 2019 onwards: it is for businesses with a turnover of less than £10 million per annum and a balance sheet of less than £7.5 million. The complaint must not be, or have been, eligible for the Financial Ombudsman Service.
As we have been carefully designed to dovetail with the Financial Ombudsman Service, the applicable criteria for the historical scheme, depend on when the alleged act or omission by the bank occurred:
- For the period from 1 December 2001 to 31 October 2009: businesses with a turnover of at least £1 million but less than £6.5 million per annum and a balance sheet of less than £5 million may be eligible.
- For the period from 1 November 2009 to 31 March 2019: businesses with a turnover of more than €2 million (to reflect the European definition of ‘SME’) but less than £6.5 million per annum, and a balance sheet of more than €2 million but less than £5 million may be eligible.
The BBRS’s criteria do not include employee numbers, but as the Financial Ombudsman does take this into account, SMEs with complaints made on or after 1 November 2009 and a turnover and annual balance sheet each of less than €2 million may also be eligible for the BBRS if they employed 10 or more persons.
The BBRS is unique in several ways, but perhaps most interesting is its concessionary case process. This process means that we may, in some circumstances, be able to look at complaints even though they are technically ineligible for the scheme. Broadly speaking, this would apply to cases that fall slightly outside our eligibility criteria but we consider worthy of attention and so ask for the relevant bank’s consent to do so, or to cases that have already been through independent review schemes but have new evidence which was not previously considered.
Our eligibility criteria are far from straightforward, and we would advise anyone with clients who could be eligible to register them for the service. Solicitors are valuable intermediaries for us, and we have already seen a number of customers with representation.
How does the BBRS work with businesses and banks to effectively resolve disputes?
The service has been designed to be easy to access, empathetic and flexible in its approach. Each business using the BBRS will be assigned a Customer Champion, who will act as a single point of contact and offer practical support throughout the business’ journey through the BBRS process.
We use a variety of alternative dispute resolution (ADR) techniques to settle unresolved complaints, including mediation and conciliation as well as full adjudication if necessary. We make decisions based on what is fair and reasonable in the circumstances and seek to inspire confidence through the consistency of our approach.
The service has been designed to be easy to access, empathetic and flexible in its approach.
In assessing this, the BBRS will consider all available evidence, taking into account relevant law and regulations; regulators’ rules, guidance and standards; codes of practice; and (where appropriate) what the BBRS considers having been good industry practice at the relevant time. Our scheme rules make clear that we are not looking for pleadings, so it is worth noting that lawyers need not provide these for their clients.
Our jurisdiction is much broader than the courts; this is key, as many of the issues we have seen are not complaints about the banks doing something unlawful, but have been about banks treating customers poorly from the perspective of what would have been fair and reasonable.
There are a number of benefits of using ADR. Crucially, ADR focuses on reaching an outcome which both parties are comfortable with – making the BBRS not only a mechanism for dispute resolution, but also for rebuilding trust between banks and businesses. Evidence shows that mediation often offers a more satisfactory outcome because the parties are involved in shaping it and can be creative about the solution to their dispute.
As Chief Adjudicator, what is your role in the organisation?
As Chief Adjudicator I have overall responsibility for dispute resolution, investigation and adjudication within the BBRS.
I oversee the review of complaints and appeals handled by the BBRS. Working with the Customer Champions and Case Assessors, and within the Scheme Rules, I determine eligibility and the appropriate approach for handling complaints. In addition, I oversee decision-making and the appeals process.
As someone with an extensive background in pro bono work and charitable organisations, what attracted you to the BBRS?
Throughout my career I have been interested in the ‘David vs Goliath’ dynamic in the search for justice. It was that, coupled with my passion for social justice, that drew me to the BBRS. I am also an accredited mediator and believe that the ADR techniques used by the BBRS offer great benefits. I very much hope that we can demonstrate these benefits over time and encourage the wider use of ADR to resolve this kind of dispute.
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What will the BBRS be focusing on in 2022?
The focus of the BBRS for the foreseeable future will be on delivering fair and reasonable outcomes for eligible SMEs. One of the main challenges we face is getting the word out to SMEs, particularly those eligible for our historical scheme, which has a deadline of 14 February 2023 for registrations.
Although it is clear the banks have learnt many lessons from the financial crisis in 2008-09, I suspect we will see a rise in cases for our contemporary scheme in the future as the full impact of COVID-19 on our economy, and particularly SMEs, emerges.
Alexandra Marks, Chief Adjudicator
Business Banking Resolution Service
C/O Legalinx Limited, Tallis House, 2 Tallis Street, Temple, London, United Kingdom, EC4Y 0AB
Tel: +44 0345 646 8825
Alexandra Marks has over 35 years of experience as a lawyer. For the past 15 years, she has sat as a part-time judge in the Crown Court, High Court and First-tier Tribunal. Before that, she was a partner at Linklaters and an accredited mediator. Alexandra is also deeply involved in human rights and social justice organisations. She was Chair of Amnesty International for 10 years and has been a Council Member of JUSTICE since the 1980s.
The Business Banking Resolution Service (BBRS) is s a non-profit organisation set up to resolve disputes between eligible larger SMEs and participating banks. To find more information about the service and discover whether it could be relevant for clients, free resources can be found on the BBRS website or by emailing the organization at hello@thebbrs.com.
