HBOS Reading Fraud

In January 2017, Lyndon Scourfield and Mark Dobson, both directors in HBOS’ Impaired Assets Division in Reading, together with (amongst others) David Mills, Michael Bancroft and Tony Cartwright of Quayside Corporate Services, were jailed for their part in the now infamous HBOS Reading fraud.

The HBOS Reading fraud is, unquestionably, one of the largest and most disgraceful banking scandals in UK history.

Over a period of many years, Lyndon Scourfield and his fellow co-conspirators defrauded and destroyed countless viable, but vulnerable, business customers who were supposed to be under their care.

The fraud took many forms, some crude, some subtle, but all motivated by greed.

One classic hallmark was the imposition of Quayside as purported turnaround consultants, but whose real purpose was to bleed companies dry through exorbitant, fictitious, consultancy fees.

Another feature was the deliberate abuse of overdraft facilities to choke companies to death and pick off their assets through captive liquidations or administrations.

Victims would invariably encounter personal abuse and bullying of the most vile and unprofessional kind.

Total losses have been estimated at in excess of £1 billion.

Following the criminal trial, Lloyds Banking Group, which bought HBOS in 2009, set up an “independent” review, overseen by Professor Russel Griggs, which, it said, would provide “fair, swift and appropriate” compensation to victims.

However, the reality had proved very different with the Griggs Review facing widespread and severe criticism from victims, practitioners and Parliament alike over its design, operation and desultory offers of compensation.

As a consequence, LBG was forced to set up a separate review, headed by Sir Ross Cranston, a retired High Court Judge, to scrutinise the Griggs Review. Sir Ross Cranston delivered his report on 10 December 2019. Sir Ross subsequently published clarifications to the Recommendations made in the Cranston Report.

Following the conclusions of Sir Ross Cranston’s report, a further independent re-review headed by Sir David Foskett (“The Foskett Re-Review”) was established to reassess the direct and consequential (“D & C”) losses suffered by fraud victims. The deadline for opt-in to the Foskett Re-Review is Friday 4th September at 16:00 (see the Foskett Re-Review website).

In a separate development, LBG has also been obliged to set up a review to examine the extent to which it may itself be said to have covered up the Reading scandal since the time it acquired HBOS.

This review, which is headed by Dame Linda Dobbs, another retired High Court Judge, is likely to report in 2020.

To date, DaySparkes has represented over 30 individuals in their fight to secure fair compensation through the Griggs Review and High Court proceedings. In our experience, the fraud was not confined to the limited matters exposed through the criminal trial and did not always involve Quayside.

DaySparkes are uniquely and expertly qualified to advise on this and similar banking fraud matters.

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