Sir David Foskett has been appointed to chair the independent Re-Review Panel (also known as the Foskett Panel) to reassess the direct and consequential (‘D & C’) losses suffered by victims of the fraud committed at the ‘HBOS Impaired Assets unit based at Reading and Bishopsgate (‘IAR’)’. Sir David is joined on the independent Panel by Philippa Hill and Andrew Hildebrand.
The work of the Panel arises from the conclusions of Sir Ross Cranston’s report, known as ‘The Cranston Review’, published in December 2019. The Cranston Review concluded that the way Lloyds Bank had dealt with D & C claims in its original Customer Review was unsatisfactory and did not achieve the purpose of delivering fair and reasonable offers of compensation. He recommended that the process of assessing direct and consequential losses should be carried out again, but this time in a fair and proper manner. In a second report, published in April 2020, he suggested how the reassessment exercise might be carried out.
The Panel has completed its work on part of its Scope and Methodology Statement which can be found here, and has published guidance notes entitled ‘IAR Fraud and the Causation of Loss’ and ‘Quantifying D & C losses’.
The time by which to indicate a wish to opt in to the Re-Review process was 4pm on Friday 4th September. Our thanks to all of you who have completed the opt in process. Overall, we have had in the region of 150 individual requests to opt in.
A few Customers have written to us recently to request further time to complete the formalities of the opt in process, namely, to finalise their agreement with the Bank. These extension requests have been granted, as have requests from those who are still going through the de facto director and related processes and are awaiting their completion.
As you may be aware, the APPG on Fair Business Banking, the SME Alliance and representatives for some Customers, have recently questioned our interpretation of the expression “the IAR fraud” in Sir Ross Cranston’s reports. As stated in our 27 August update, the scope of the IAR fraud as set out in our methodology is as described by Sir Ross Cranston who referred to “the IAR fraud” as that which was the subject of the criminal trial of 2016-17. We are nevertheless looking urgently into the concerns that have been raised, including the risk that certain Customers could be disadvantaged, with a view to recommending a way forward. Opt in periods for Customers who consider they may be affected have also been extended while we explore this.
We want to reassure Customers who have fully completed their opt in process that we intend to proceed as planned in relation to their cases. We have begun working to determine the order in which cases will be considered. Understandably, everyone wants their case dealt with as soon as possible, not least because the fraud occurred so many years ago and Customers are just wanting finally to draw a line under it. We understand that fully. However, we do need to take into account, in particular, any special circumstances that have been raised with us by Customers, including advanced age, chronic or acute mental ill health, serious physical illness and severe financial distress.
We also have to consider the connectivity between certain Customers’ cases and the benefits of investigating them at the same time. There is also the desirability from our perspective of considering a reasonable variety of cases which will allow us to develop a better appreciation of the wider picture of the IAR fraud than we could from considering cases one at a time in isolation. Our current plan is, therefore, to consider selected cases in batches, which will include Customers with the more urgent special circumstances in the earliest batches.
We will try to reach a balanced view on all these matters. We hope to make a decision on the first group of cases shortly and will contact those Customers as soon as we can. We will provide updates on how our work is progressing and once we have made some headway (and thus have obtained a better understanding of the extent and complexity of the work involved), we will try to provide some guidance on the possible overall timescale of the Re-Review process.
Sir David Foskett
Chair of the Re-review Panel
If you have any questions or comments in the meantime, please contact email@example.com