A tribunal for resolving financial disputes in which claimants can bring cases ‘without the need for a lawyer’ will give SMEs the tools they need to fight large corporations, according to a parliamentary debate yesterday in which lawyers’ efforts to prevent wrongdoing were also called into question.
The calls were made during a House of Commons debate on the scandal enveloping Royal Bank of Scotland and its Global Restructuring Group (GRG). The bank is accused of putting 16,000 business customers into its GRG division, telling many it was there to help turn their fortunes around.
Norwich South MP Clive Lewis, who called for the debate, said an independent inquiry into the treatment of SMEs by financial institutions should be held as well as ‘the rapid establishment of a tribunal system to deal effectively with financial disputes involving SMEs’.
The debate took place following articles by barrister Richard Samuel, a tenant at 3 Hare Court, who said the Financial Services Tribunal (FST) would help SMEs and make it easier for claimants.
MPs said the tribunal would have low fees and would not necessarily require a lawyer to run the case. Christine Jardine, MP for Edinburgh West, added: ‘The process would be cheaper and less formal, and complainants would not need a lawyer. We know that such a process works in other places.’
However, MPs also called into question the role of solicitors and other legal practitioners during the GRG affair. Chris Ruane, MP for the Vale of Clwyd, said: ‘The web of deceit between a whole range of organisations is highly complex, from the big banks—RBS and Lloyds—to accountants, solicitors and valuers.’
Norman Lamb, MP for North Norfolk and himself a qualified solicitor, said: ‘What of the role of lawyers in managing the conflict of interest, or of the accountants, or of the auditors? Who was complicit in this scandal?’
According to Lewis: ‘The introduction of a tribunal system will help to rebuild the strong relationships that once existed between SMEs and their banks, helping the growth of our economy and the international reputation of our financial sector.’
Samuel told the Gazette the tribunal system does not usually rely on lawyers to put a forward case on behalf of a client.
‘In this instance, the judge is the inquisitor. They ask questions of both sides and determine the appropriate outcome,’ Samuel said.
He added: ‘Tribunals always exist where there is an imbalance of power. In employment tribunals, you may have a large employer against an employee, or in immigration tribunals an individual against the state. Overall its more flexible and cheaper than going to court.’
However, Samuel denied that lawyers would be completly bypassed and could still provide early stage advice on the merits of a claim.