17th February 2020
Disagreements between banks and business customers happen all the time, whether it is over something minor like contested charges or something more serious like the enforceability of a personal guarantee or even bank fraud.
‘The approach you take to resolving such matters will depend on a variety of factors, including the complexity of the issues raised and any adverse consequences that may arise if the dispute is not resolved in your favour,’ explains Tim Newsome, a dispute resolution lawyer with Myers & Co Solicitors in Stoke-on-Trent. He outlines the ways in which banking disputes can be tackled and explains your solicitor’s role in helping you to achieve a satisfactory outcome.
Currently, there are five principal ways in which a banking dispute can be resolved:
In the future, you may also be able to use the Business Banking Resolution Service once it is fully up and running – click here for further details: https://thebbrs.org/about-us/
Usually it would seem logical to start with option one and then work your way through the list in numerical order. However, there are cases where this will not be appropriate and jumping straight to option five and seeking court assistance would be the best route.
This includes where an injunction is required to prevent your bank from taking action which could have serious or irreversibly damaging consequences for your business, such as revoking your credit facilities or appointing an administrator.
There may also be cases where a referral to the Financial Ombudsman Service is not permissible because your business does not satisfy the eligibility criteria. These require you to be one of the following things:
Also, you may not be eligible if you have not used your bank’s complaints procedure first or have waited more than six months following the conclusion of that process before referring the matter to the Financial Ombudsman.
When you seek advice from a solicitor, our role will be to:
We recommend talking to a solicitor as soon as it becomes clear that your dispute is unlikely to be resolved through a simple administrative process or where the stakes are high if the dispute is not resolved in your favour.
Specifically, we advise that legal advice is sought where your dispute concerns:
Many of the clients who come to us do so because they feel their bank is not taking them seriously or because positions in the dispute have become entrenched.
In this scenario, our advice is to contact the bank and ask them if they are prepared to enter negotiations or to agree to a mediation in which an impartial person is asked to work with you to explore possible settlement terms.
In our experience banks are keen to engage in this process because they want to keep disputes out of the court arena when they can, and because they know how effective negotiation and mediation can be even in apparently intractable matters.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.