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RBS settlement: Is it a mixed result?

RBS settlement: Is it a mixed result?

RBS SETTLEMENT: is it a mixed result?

The reports of the settlement between Mike and Diane Hockin marks the end of an 8 year dispute with RBS. The bank sold them interest “swaps”. These swaps were the basis of business lending and it went very wrong.

This was the subject of a highly critical Government- commissioned report by Lawrence Tomlinson. The Hockins’ business struggled under the costs of the interest “swaps” product and the additional bank charges. RBS then transferred their debt to a company mainly owned by RBS who sold off their business.

The settlement was reached three days into the trial. The settlement was made on the basis that RBS did not admit liability and confidentiality was maintained about the terms, including any money that has changed hands. The end result is that this has kept much behind closed ‘confidentiality’ doors.

Mr Hockin has made it clear that he regrets that he won’t now have the opportunity to demonstrate in court how he believes the bank treated him. This is an all too familiar tale. The banks routinely fight cases they think they can win, and settle those they think they will lose with the benefit of a “gagging order” . This the public gets the impression that the banks are immune to legal action by customers, when in truth they are surprisingly vulnerable.

A settlement reached before a trial pans out enables the parties to draw a line and move on.  It’s always best if settlements happen earlier rather than later, and a settlement during the trial can be particularly disappointing from the claimants’ perspective in that the “peace deal” limits scrutiny of the bank’s conduct just at the moment when the claimants are about to have the public vindication they have earned after having lived  with the stress of the case for many years.

RBS has a track record of fighting these cases hard.  It has had some success in fending off claims the facts of which in truth do it no credit.  In this case one can guess the bankused its financial muscle to the full, making Mr and Mrs Hockin run the case to trial. The Hockins did well to stick it out and win. It remains to be seen whether the RBS will now change its approach other claimants.

The Hockins are just two of many claimants with lost businesses keen to make claims against the banks and challenge the banks about their conduct and questionable adherence to good banking practice