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On 15 February 2021, after a lengthy gestation period, the Business Banking Resolution Service (BBRS) was launched. This voluntary scheme aims to provide a new dispute resolution service for eligible small and medium size enterprises (SMEs) and participating banks, to resolve complaints without the need for litigation or external legal support. SMEs are now receiving some of the first outcomes from the BBRS.
In this article we provide a high level example of how the BBRS process is expected to apply in practice, using a case study of a complaint brought by the fictitious business, “SME Limited”.
SME Limited has a turnover and balance sheet of c.£7 million. It brought a complaint to its bank in relation to certain fees applied to its business current account in June 2020. The complaint went through the bank’s internal complaints process and a final response letter was issued, declining to uphold the complaint and containing referral rights to the BBRS.
SME Limited was not happy with the Bank’s final response and referred the complaint to the BBRS. On review the BBRS was satisfied that SME Limited is an eligible complainant:
NB: If the bank believed SME Limited’s eligibility had been wrongly assessed, there may have been scope for the BBRS Appeal Panel to reconsider the decision on eligibility at the Bank’s request.
Assuming that the BBRS is satisfied that SME Limited’s case is eligible for the scheme, it will appoint a Customer Champion and obtain details of the issue and evidence from SME Limited. At the same time the BBRS will also notify the bank of the case and provide it with an opportunity to respond and produce its own evidence on the matter. These are the main evidence gathering steps taken by the BBRS.
Once SME Limited and the Bank have considered each other’s evidence, the Customer Champion will explain the options available to SME Limited for resolving its complaint, which may include one of the following:
In this instance (and as we anticipate will be the most frequent method), Adjudication is used. The BBRS Case Assessor will therefore review the evidence and, on a “fair and reasonable” basis make a provisional determination, which both SME Limited and the Bank will have an opportunity to review and respond to.
Once comments and any additional information have been provided (if relevant and permitted by the Case Assessor), a formal determination will be made within 28 days and SME Limited can chose to accept or reject this. The formal determination may also be appealed by either party (see below).
The scheme is intended to ensure each complaint is dealt with in a fair and reasonable way. Subject to the resolution method used and the outcome, the BBRS may decide to decline to uphold the complaint, uphold part, or uphold all of it.
If all or part of the complaint is upheld, then either:
Any financial awards will be limited. For the historical scheme the cap is £350,000 and for the contemporary scheme, the cap is £600,000. There is scope for the BBRS to recommend awards above these limits, but the ultimate decision for awards exceeding the cap sits with the bank, subject to the bank having considered the BBRS recommendation reasonably and in good faith. Moreover, if the SME rejects the outcome, it is not restricted from potentially pursuing the matter via alternative means.
Regardless of the outcome, the BBRS will provide both parties with an explanation for its decision.
If a matter is handled via Adjudication, there are three circumstances in which either SME Limited or the bank may appeal the formal determination if they are unsatisfied with the outcome:
On receipt of an appeal notice, the BBRS will notify the other party and ask them to respond within a set timeframe. The matter will then be re-determined based on its merits and a final determination will be issued to the parties, which may be accepted or rejected. There will be no further opportunities to appeal the final outcome.
Generally, the scheme can be seen as a positive move for the market. It provides SMEs with reassurance that they have various options when it comes to having their complaints handled beyond the remit of their banking service provider and without a litigious element. From the participating banks’ perspective, the scheme will provide an alternative way to effectively manage its resources without the need to factor in the time and cost associated with litigation. It is also positive that the BBRS requires end customers to themselves adhere to certain rules, such as dealing with their complaint in good faith.
As cases now start to filter through the scheme, we will begin to see an indication of how the scheme process is being applied and the method of resolutions most used, efficient and successful. However, until this time it is imperative for participating banks’ complaints and legal and compliance teams to be familiar with the BBRS process and alert to SME complaints which, if eligible, could be escalated to the BBRS. It may also be beneficial for banks to consider their processes for recording and maintaining internal decisions and outcomes of SME complaints, as this management information may prove invaluable at a later stage when streamlining BBRS dealings.
If you would like to discuss dealing with BBRS complaints further, please do not hesitate to contact Peter Richards-Gaskin, Partner, or Jack Hargreaves, Associate, in TLT’s Financial Services Disputes and Investigations team.
04 May 2021