THE man who leads the action group of National Australia Bank customers claiming to have been mis-sold complex business loans is claiming a significant retreat by the bank in the Court of Session.

John Glare, founder of the NAB Customer Support Group, took the bank to court last year to challenge Clydesdale Bank's claim that his fixed rate Tailored Business Loan (TBL) had been properly sold to him as a suitable product.

He says that confronted with evidence to the contrary from independent experts, including Professor Michael Dempster of Cambridge University and Simon Jaquiss of the QA Legal group, the bank had now admitted that the loan was mis-sold.

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In 2009, conference centre owner Mr Glare was hit with hidden "break costs" of £780,000 on his £3.9million loan from the bank. He was subsequently forced into bankruptcy. In 2012 he formed the action group which now has 128 SME members.

His lawyer Gordon Deane, litigation partner at Balfour & Manson in Edinburgh, said: "The bank has admitted that John Glare should not have been sold a 25-year loan and that the loan was in breach of their own internal standards. This is a significant U-turn on the part of CB."

Up to 60,000 fixed rate TBLs were sold by banks but have escaped the regulatory review by the Financial Conduct Authority, despite having similar characteristics as regulated loans linked to derivatives, forcing small businesses to go either to the financial ombudsman or to law.

Mr Deane said the bank had been faced with "a number of difficult issues" including how it quantified the break costs that it imposed on Mr Glare's account when his fixed rate TBL was terminated. "In his summons, Mr Glare had argued that these break costs were not recoverable. CB could not demonstrate a direct link between the termination of the TBL and any alleged 'break' in a corresponding hedging instrument."

He said Mr Glare had also raised a claim under Section 140B of the Consumer Credit Act 1974 to the effect that the relationship between himself and the bank was "unfair". Mr Deane said: "In conceding that the loan was mis-sold, CB have acknowledged that Mr Glare has a right to pursue a claim under the 1974 Act. This Act gives a court a wide discretion to compensate any customer in an 'unfair relationship'." There appeared to be "currently no judicial decision" in this area.

Clydesdale Bank has responded strongly to the claims. A bank spokesman said: "The statement issued by Mr Glare and his representatives is misleading, inaccurate and should not be relied upon. It is our view that the Court of Session remains the appropriate forum to deal with this case and that it should be allowed to reach its own conclusions."

Meanwhile The Herald understands many small business TBL borrowers whose complaints against the bank have been rebuffed over the past two years are now being offered settlements by the bank. The offers coincide with a raft of imminent final adjudications by the Financial Ombudsman Service on TBL complaints which are set to go against the bank on grounds of mis-selling.

One licensed trade entrepreneur and member of the NAB Customer Support Group, who did not want to be identified, said: "The offers being made to customers are well below expectations but in some cases are a lifeline. The bank is also insisting on full and final settlement."

The bank said this week it was "nearing completion of a review of historic fixed-rate TBL complaints" , adding: "Any customer who has a past or current complaint can be assured that it will be dealt with in a fair and consistent way."