The Business Banking Resolution Service examined

The Business Banking Resolution Service (BBRS) was established following the Walker review, and provides an independent dispute resolution service for disputes arising between SMEs and lenders. They handle claims that cannot be heard by financial ombudsman service.

Originally set to launch in November 2020, this has now been postponed. The BBRS hopes to be fully operational in the early 2021 with seven participating banks:

• Barclays
• Danske Bank
• HSBC
• Lloyds Banking Group
• RBS Group
• Santander UK plc
• Virgin Money

You can view the Live Report: Initial findings here.

The BBRS have been preparing to handle a flood of COVID-19 related claims as advised by the Treasury. This will be a shift in focus away from the initiative proposed in May, which was to handle disputes dating back to 2001. The forum will hear a proportion of the £14 billion worth of CBILS loans that have been issued to 60,000 businesses so far.

The BBRS will handle disputes including disagreements over rejected applications, and where borrowers’ requests to amend loan agreements due to changing conditions and/or regulations have been denied. Each applicant will be assigned a consumer champion, and will be encouraged to settle the dispute informally, turning to mediation and adjudication only as a final resort.

So far the seven of the UK’s largest banks that have signed up may have to pay up to £600,000 if a case is not decided in their favour. The BBRS are hopeful that others will sign up, as currently there are over 90 lenders who do not have entry to the voluntary scheme.

Going forward, the BBRS wish to emphasise the message that CBILS are loans and not grants, in an attempt to help avoid future misunderstandings. There are also hopes that the scheme may be reformed in order to improve applicant success rates. This is following findings of overall loan approval rates of 63% which was deemed too low.