A former boss of Gibraltar’s financial services regulator has been picked to oversee a new disputes mechanism that could force banks to pay millions of pounds in compensation to small busineses.
Daily Week News has learnt that Samantha Barrass, who stepped down as chief executive of the Gibraltar Financial Services Commission in the autumn, is to take the same role at the Business Banking Resolution Service (BBRS).
The new body, which is being backed by Britain’s six biggest high street lenders, has been set up to address years of scandal over the mistreatment of a proportion of their SME customers.
The Treasury and Financial Conduct Authority have been notified about Ms Barrass’s appointment, which is expected to announced in the coming days.
Sources said on Thursday that Alexandra Marks, a deputy High Court judge, has been recruited by the BBRS to act as its chief adjudication officer.
In total, as many as 60,000 SMEs are understood to have eligible past claims against banks including Barclays, Lloyds Banking Group, Royal Bank of Scotland and Virgin Money UK – which includes the Clydesdale and Yorkshire networks.
The BBRS, which was set up after a recommendation by Simon Walker, the former head of the Institute of Directors, will also adjudicate on relevant future complaints.
Its establishment has been a painful process for the banking industry and SME campaigners, who have long-argued that a gap in the UK’s regulatory system permitted egregious abuses of small business customers.
In particular, the division of RBS which handled struggling SMEs during the financial crisis – and after its bailout by British taxpayers – has been a running sore, and the subject of several formal inquiries.
The scandal at HBOS’s Reading branch, which precipitated the collapse of a number of companies, has also fuelled the sense of injustice about SMEs’ treatment.
There has also been protracted disagreement over the premise that SMEs which have been through an earlier redress scheme administered by individual banks would not be eligible for review by the new body.
This month, the BBRS launched a pilot to enable SMEs to register to use the adjudication service.
Responding to the launch, Stephen Jones, chief executive of the trade association UK Finance, said it marked “an important milestone in the creation of a resolution service for businesses that is trusted, transparent and fair”.
He added that the BBRS would be “a ground-breaking service with a scope, mandate and level of expertise beyond anything seen elsewhere in the world.
“Once fully operational, 99 per cent of small businesses will have access to this independent service or the Financial Ombudsman Service.”
A BBRS spokesman declined to comment.