Revealed: Clifford Chance investigation into RBS hits obstacles as report delayed
Clifford Chance's (CC) independent review into the lending practices at the Royal Bank of Scotland (RBS) has been delayed by difficulties in evidence collection, Legal Week has learned.
March 02, 2014 at 07:12 PM
3 minute read
Clifford Chance's (CC) independent review into the lending practices at the Royal Bank of Scotland (RBS) has been delayed by difficulties in evidence collection, Legal Week has learned.
The magic circle firm was drafted in last November to conduct an independent review of the practices of RBS' Global Restructuring Group (GRG), which had been accused of mistreating the bank's customers in a report by entrepreneur Lawrence Tomlinson.
A deadline for the CC report publication had initially been set for 31 January, but has since been extended to "later in the spring", according to an RBS spokesperson.
Legal Week understands several businesses which passed on information to Tomlinson have declined to forward evidence to CC, having previously encountered the firm as an adviser to the bank in restructuring litigation.
Others are also understood to have been nervous about forwarding commercially sensitive information to the magic circle firm, given its history of advising the bank.
In November, RBS stated that CC's instruction did not amount to a conflict of interest, despite the firm acting for the bank in various related restructuring and litigation matters.
"From our knowledge, many businesses have been in touch with Clifford Chance," commented a spokesperson for Tomlinson. "Lawrence has been as supportive of their review as far as is appropriate and has had a positive dialogue with their team.
"All the evidence received in the compilation of the Tomlinson Report was done so on an anonymous and confidential basis. Lawrence is therefore unable to share details of any of these cases without the prior consent of the business.
"Lawrence has not discouraged any of the businesses from participating in the Clifford Chance review but there's never going to be a guarantee that all the businesses who contacted him will be willing to pass on information to the firm, due to concerns over the impact on their current banking relationships."
Commenting on the reasons for the delay, an RBS spokesperson denied that the report's terms of reference had changed, or that the delay had been caused by the volume of material forwarded to the lawyers.
"The important thing for us was to make sure it was comprehensive as possible, and that CC was given an opportunity to do this," said the spokesperson. "We're keen to keep the window open as late as possible, so any customers can forward relevant material to the investigation."
Owing to the size of the investigation, CC's lead lawyers – regulatory partners Carlos Conceicao and Kelwin Nicholls – have drafted in additional support from lawyers at TLT Solicitors and DMH Stallard.
Separately, the Financial Conduct Authority (FCA) has announced an investigation into the Tomlinson Report's findings, though all information passed on by businesses will be anonymised.
One person close to the matter said they thought CC had been "put in a very difficult position" by the review.
"Clifford Chance's reputation and relationship with the bank is on the line, here," said the source. "The FCA report will follow, and if there are major discrepancies between their findings and CC's, it's going to be very awkward for the firm."
CC declined to comment.
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