Magic circle firm Clifford Chance is to face possible questions from the Solicitors Regulation Authority (SRA) for allegedly overlooking allegations of fraud during its investigation into Royal Bank of Scotland's treatment of small companies in financial difficulties. 

Clifford Chance was accused by a small business owner of failing to act on detailed evidence surrounding the activities of RBS’s Global Restructuring Group (GRG). The allegations are currently subject to a police investigation. RBS has denied any wrongdoing. 

The Gazette understands that the SRA is looking at the evidence and is likely to consider whether a formal investigation will be necessary.

Allegations surrounding the restructuring group began in 2013 when Lawrence Tomlinson, who was entrepreneur in residence at the former department for Business, Innovation & Skills, said the bank deliberately put viable businesses on a path to destruction while aiming to pick up their assets cheaply. 

IN 2014 RBS commissioned Clifford Chance to prepare an independent report on Tomlinson’s allegations. It concluded that there was no evidence to support most of them. Critics said the Clifford Chance report did not go far enough.

The following year, the Financial Conduct Authority (FCA) undertook its own review.

According to the FCA, RBS was guilty of ‘systematic mistreatment’ of distressed small businesses. However, the report cleared the bank of the most serious allegation, that it forced businesses into default for its own benefit.

The allegation against Clifford Chance has been made by Clive May, owner of a small bricklaying business, who claims he presented the firm with clear evidence of abuse by the GRG. May was interviewed by Clifford Chance as part of the 2014 report.

Clifford Chance declined to comment.