On Friday 30 November 2018, UK Finance published its response to the Walker Review into the complaints and ADR landscape for the UK’s SME market.
The Walker Review focused on disputes between providers of financial services and SME customers that remain unresolved through existing customer complaints procedures and may be unsuitable for court processes. The Review was commissioned by UK Finance; Simon Walker CBE was appointed as independent chair of the Review; and the findings of the Review were published on 23 October 2018 (see our separate LawNow here). The findings set out three key areas where action could be taken to assist SMEs:
The role of the Financial Ombudsman Service (FOS);
A role for voluntary ombudsman arrangements in providing ADR; and
The need for better monitoring, information and dialogue to rebuild the relationship between banks and SMEs.
Through UK Finance, seven banks operating in this market in the UK (the “Seven Banks”) have responded favourably to the Walker Review. The UK Finance response sets out the Seven Banks’ agreed proposals for implementing the suggestions of the Walker Review:
1. Expansion of the scope and capability of the FOS
2. A voluntary Ombudsman scheme
a) for larger SMEs:
b) for eligible historic cases:
3. Independent SME Advisory Council
The UK Finance response is supportive of the detailed and considered recommendations in the Walker Review. There now appears to be a wide consensus for the expansion of the FOS’ remit in line with the current proposals.
Further, the SME sector will welcome the proposals for an additional route to resolve larger disputes via the interim voluntary ombudsman scheme.
However, it is worthwhile noting that the proposals in the UK Finance response are only expressly agreed by the Seven Banks. The report states that these banks believe that the effectiveness of these proposals would be enhanced by the broadest possible participation, including from non-bank lenders and new providers in the marketplace serving eligible SMEs. Therefore, to what extent these proposals are taken up by others will be important to observe. In particular, if other lenders to SMEs do not join the voluntary ombudsman scheme, SME customers will have to be mindful of the different recourse available to them to resolve their dispute(s).
A copy of the Report can be accessed here
Please contact the authors if you would like to discuss any aspect of this report.
 Barclays, CYBG, Danske Bank, HSBC, Lloyds Banking Group, Royal Bank of Scotland and Santander