Clifford Chance in spotlight
Legal watchdogs may probe law firm’s RBS inquiry
RBS involved in further controversy (photo by Terry Murden)
A watchdog for the legal sector is likely to launch an inquiry into a complaint over a City law firm’s investigation into Royal Bank of Scotland’s treatment of small firms.
The Solicitors Regulation Authority (SRA) is pursuing claims made against Clifford Chance which was appointed by the bank following revelations in the Lawrence Tomlinson Report in 2013 which alleged the bank had mistreated thousands of small companies. Critics said Clifford Chance’s subsequent report was a “whitewash”.
The firm could face an investigation from the SRA following an allegation that it overlooked a claim of fraud during a review it carried out into lending practices at RBS’s turnaround division, the global restructuring group.
One of 138 former GRG customers interviewed by Clifford Chance for the report complained to the SRA about the magic circle firm in 2015 and 2016, alleging that the firm overlooked a claim of fraud.
Clive May, the owner of a bricklaying business, claims to have presented evidence to the firm that GRG was abusing the government’s enterprise finance guarantee (EFG) scheme, which he believes was overlooked.
Mr May claims that an EFG loan was used in order to reduce his company’s overdraft from £245,000 to £70,000, before his company failed in 2013.
He further alleges that an RBS relationship manager asked him to remove a second home from his EFG application form as the property would have disqualified him from the government loan, information he gave to CC.
GRG closed in 2013 and the Financial Conduct Authority’s investigation found evidence of serious misconduct.
An SRA spokesperson said: “We can confirm we are likely to investigate, but are unable to comment any further.”