FOR MBM Commercial partner Cat MacLean the enactment of the Scottish Government’s Civil Litigation Bill, which passed its final hurdle yesterday, cannot come quickly enough.

Having spent much of the last decade bringing legal claims against Royal Bank of Scotland, Ms MacLean is now representing a growing number of former Clydesdale Bank customers who are looking to take action against an American company that bought close to £1 billion of loans from the bank in 2015 and 2016.

Clydesdale Bank owner CYBG declined to comment, but it is understood that the deals saw it sell a portfolio of distressed debt to entities controlled by US firm Cerberus Capital Management, all of which include the word Promontoria in their name.

Read more: New venture is to help SMEs with RBS claims

Promontoria has started calling in the debts, as it is entitled to do. In a decision handed down in Greenock Sheriff Court last August, Sheriff Derek Hamilton noted that as the “heritable creditor” on a range of loans Clydesdale made to buy-to-let business Portico Holdings, Promontoria had the authority to repossess the related properties in order to recoup the debt when Portico defaulted.

However, Ms MacLean, who in 2015 secured a UK Supreme Court ruling that said verbal promises made to property developer Derek Carlyle by RBS were binding, believes some of the former Clydesdale customers have similar grounds for contesting Promontoria’s actions.

“Some clients really were distressed borrowers but quite a lot are in default because their loan to value ratio has altered or because their lending had been on an initial term of five years,” Ms Maclean said. “The bank told customers they would renew the loans after five years but then the loans transferred to Promontoria.

Read more: New group formed to help tackle bank claims

“What we are saying is that there was a binding contractual promise from Clydesdale Bank to support those clients and not call in those debts.”

As Promontoria has succeeded Clydesdale as creditor on the loans, Ms MacLean believes it should also be bound by verbal promises her clients claim were made to them. That would allow clients to try to refinance their debt before Promontoria could enforce it, she said.

“Refinancing will result in a payment being made to Promontoria and the customer will end up in a lending position with a bank,” she said.

The problem is that while the customers Ms MacLean is acting for all have similar complaints, each case against Promontoria is having to be pursued separately.

“In Scotland you can’t do any kind of class action,” Ms MacLean said.

“We’re having to litigate on a case by case basis because that’s all we can do in Scotland at the moment.

“We’ve had some success in defending and advancing claims but [for clients] it takes money to do that and a certain degree of determination.”

As the parliament okayed the Civil Litigation Bill yesterday, group actions are going to be possible, but only once the bill is enacted, the Scottish Civil Justice Council draws up up the rules for governing them and the Court of Session gives its approval for each action to proceed.

Read more: RBS urged by MP to settle case with bankrupt developer ahead of FCA report

Nevertheless, in addition to a class action giving a voice to individuals who cannot afford to pursue a claim on their own, Ms MacLean said that bringing a group claim also has the potential to have more impact than numerous small cases being brought on a piecemeal basis.

“The end game is to try to strike a deal with Promontoria,” she explained.

In the meantime, Lending Standards Board chief executive David Pickering and compliance head Liz Thompson will meet members of MBM Commercial’s Financial Claims Networking Group in Edinburgh next week to discuss the issues faced by bank customers whose debts have been sold on to third parties.

While the sheriff in the Portico Holdings case was very clear that the customer’s “obligations to [Promontoria] are the same as they were to the bank”, Mr Pickering believes that third parties that buy books of debt from banks have obligations to customers too.

“Selling a portfolio of debt is a commercial decision for each registered firm,” he said, adding that Standards of Lending Practice “expect the customer to be treated in a manner equal to that of their original lender”.