Clydesdale Bank did not charge unfair fees to small firms, court rules
Reuters
Published Mar 19, 2024 10:17
Updated Mar 19, 2024 14:42
By Kirstin Ridley
LONDON (Reuters) -Britain's Clydesdale Bank and its former owner, National Australia Bank (NAB), did not charge unfair break fees on loans sold to small businesses up to two decades ago, London's High Court ruled on Tuesday.
The case was brought by four businesses against NAB and Clydesdale Bank - now part of Virgin Money (LON:VMUK) UK Plc - in an attempt to establish liability before pursuing compensation.
More than 900 other firms were watching the proceedings - an effective test case that could have had wide-ranging implications. Claimants said they were considering an appeal.
The businesses, represented by claims management company RGL Management, were seeking restitution for alleged unjust enrichment by the banks and breach of contract over fixed rate Tailored Business Loans (TBLs) bought between 2002 and 2010.
The banks were alleged to have unlawfully demanded hefty costs from borrowers who repaid fixed-rate TBLs early and to have fraudulently misrepresented the fixed interest rates as being a market rate.
But in a 185-page judgment, following a 12-week hearing last year, Judge Antony Zacaroli concluded that Clydesdale had been entitled to calculate its loss as a result of early loan repayments and that allegations of deceit, which implicated 15 mostly former bank employees, had failed to be established.
RGL said the claimants' legal team was reviewing the judgment and considering all available options, including an appeal.
"After a seven-year journey, RGL, the claimants and their advisors are all extremely disappointed by the judgment," the group added in a statement.
NAB, which sold Clydesdale Bank in 2016, and Clydesdale welcomed the judgment.
"We are pleased with today's judgment in favour of Clydesdale Bank ... about historic tailored business loans," a Clydesdale Bank spokesperson said.
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Written By: Reuters
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