- RBS has been accused of deliberately destroying small businesses
- In the past five years, LexLaw has issued more High Court litigation over bank misconduct than all other law firms in the UK
The storm surrounding Royal Bank of Scotland’s controversial turnaround division, Global Restructuring Group, has helped drive a business boom for a law firm specialising in small business banking disputes, which has been named the fastest-growing in England and Wales.
The accolade for LexLaw came from business intelligence company Plimsoll Publishing, and founder Ali Akram said most of his firm’s business banking cases were against RBS. In the past five years, LexLaw has issued more High Court litigation over bank misconduct than all other law firms in the UK, he said.
Akram said: ‘We’ve really focused on it. As a result, the firm is financially the fastest-growing law firm in England and Wales. In the first year, from April 2013 when we converted to a limited company, we were the third fastest-growing.’
He said LexLaw’s compound annual growth was 163 per cent, adding: ‘We’ve dealt with so many of these cases. And when the banks settle they have to pay towards the legal costs.’ City-based LexLaw turned over £2.95million last year.
Former Government adviser Lawrence Tomlinson’s report claimed RBS, through GRG, had artificially distressed viable firms to push them into insolvency. The suggestion was made that one reason was to allow its own West Register division to acquire assets at discounted prices.
The Financial Conduct Authority announced a review of these allegations in January 2014. A report, expected in 2015, has not yet been published. A summary update from the FCA cleared RBS of artificially causing the transfer of customers to GRG and profiting from their distress.
RBS set up a ‘new complaints process’ on November 8 but Akram claimed it will spend millions to avoid paying billions of pounds owed.
His clients have included Bowlplex, a family business set up in 1976 by husband and wife Tony and Verna Standish in Poole, Dorset. In 2008 and 2009, the bowling industry suffered a downturn. Bowlplex expected to trade through the recession, with RBS’s support, but the bank transferred it to GRG in 2010.
Tracy Standish, who took over the management in 1986, said: ‘Our bowling business had been growing for 25 years and the family, and no doubt RBS, knew we had a very viable business with top-quality locations that would bounce back with the economy.
‘The bankers at GRG were intent on charging large complex fees and elevating interest rates and, unbelievably, extracting equity from us.
‘Within a short time it became clear the bank was out to take control of the firm. This was communicated by RBS West Register, who said they would take 80 per cent of our equity to maintain support.’
RBS, through GRG and West Register, obtained 80 per cent of Bowlplex’s equity. It wrote off £4.45million of debt. West Register received almost £14million on the sale of Bowlplex.
Standish said: ‘Even when the business was sold it was not done so openly, in a way which ensured full value was obtained. As a result of the bank’s actions, we were deprived of a business that the family and RBS knew would bounce back to be worth some £60million, which it has.’
RBS declined to comment. It has said it let some customers down but denied deliberately causing them to fail.