The APPG criticises voluntary redress schemes set up by financial institutions and instead calls for an independent, quasi-judicial dispute resolution system between businesses and banks. This will level the currently uneven playing field, allowing businesses greater access to justice.
Statement from the All Party Parliamentary Group on Fair Business Banking and Finance 15 September 2017 Access to Justice for Businesses in the UK The APPG on Fair Business Banking has for years been leading the call for an independent, quasi-judicial dispute resolution system between businesses and banks. Businesses have been forced to bear the brunt of the banks’ capital raising efforts. And this is not just the destruction of businesses: it is families, jobs, supply chains all devastated.
It is unacceptable that we have a system that allows entrepreneurs—and the people who depend on them for employment— to be treated with contempt and denied any real prospects of defending themselves against the financial firepower of a multinational organisation with limitless resource.
“Presently the very smallest businesses may get some redress from the Ombudsman but above that level a small business and a global corporate have only one option – to “lawyer up” and dig in for a struggle that will last for years,” says Lord Cromwell co-chair of the APPG.
“This is not just about the destruction of businesses” he adds “It is the grinding down of people and families; of jobs, and supply chains by the completely unequal position they find themselves in when in dispute with their bank”.
Thus far, the reaction to the numerous scandals over the years has been woefully inadequate. The ‘voluntary’ redress schemes set up by financial institutions quite simply do not have the moral authority or trust of the public—or Parliament. Institutions must not be allowed to be their own judge, jury and executioner in matters of misconduct. It is imperative that we have an independent, robust dispute resolution system that has full powers of disclosure. Our businesses and entrepreneurs deserve better from our institutions, regulators and government. As it stands, the system is failing them.
“It is no longer acceptable for banks to set up internal processes that act as judge and jury in such cases, while businesses – and the people who depend on them for jobs – face very slow, opaque and take-it-or-sue-us offers” he added
Time and again we have been presented with the systematic destruction of businesses in the UK, and it begs the question as to whether there are suitable safeguards within commercial lending and, indeed, the insolvency profession to act as a check for poor and, indeed, criminal behaviour. It is time that the Government, FCA and Parliament step up to the plate to ensure that businesses get fair treatment and access to affordable justice. This has been a matter left too long to drift in the regulatory and legislative wilderness, and the consequences have been catastrophic not only to individual lives, but to confidence in our entire financial system. As we enter a period of uncertainty over Brexit we must do everything in our powers to support our SMEs—the life blood of our economy.
“Once established, this tribunal system will help to ensure – through transparency and greater equality of arms – that banking, which is a vital sector of the UK’s national economy and international reputation, works better – not just in the interests of its customers but of the banking industry itself”