A long-running lawsuit against one of Britain’s largest banks over allegations that its business customers have unnecessarily paid hundreds of millions of pounds in fees and interest will be expanded this week with the addition of hundreds of new applicants.
Sky News has learned that RGL Management, which is handling the lawsuit against Clydesdale Bank, a subsidiary of Virgin Money, will announce on Tuesday that it has added 436 claims on behalf of more than 250 SMB customers.
This will bring the total number of complaints and SMEs in the class action to over 1,300 and 845 respectively.
The action has been ongoing since 2017 and has involved the recruitment of a new backer – Bench Walk Advisers – to pledge the £ 15million needed to pursue the claim against Clydesdale and its former owner, the National Australia Bank.
The litigation centers on tailor-made commercial loans (TBLs) that were sold to customers between 2001 and 2012, with earlier estimates suggesting that the total value of the claim would amount to several hundred million pounds.
Virgin Money made no provision in its accounts for the claim and rejected the prospect of paying a substantial amount.
A Virgin Money spokesperson said: “There is absolutely no basis in the allegations made in RGL’s claims, which involve four living claimants.
“Their record is weak and we remain confident in defending our position.”
In total, around 6,500 clients have been sold to TBLs, meaning that the majority have yet to subscribe to the claim.
James Hayward, Managing Director of RGL Management, said: “With this significant new wave of complaints, the largest to date, we remain extremely confident in the strength of our case.
“There is compelling evidence to prove the bank’s illegal treatment of its fixed rate loan customers and we are on the right track to guaranteeing them the compensation they deserve, which runs into the hundreds of millions of pounds. “