BRITAIN'S financial watchdog is being taken to court over its decision not to sanction any executives for the way RBS treated small business customers.

Scottish businessman and frequent RBS critic Neil Mitchell who has launched a litigation management company to take collective actions has filed an application for a judicial review into the Financial Conduct Authority's handling of an investigation into RBS's Global Restructuring Group (GRG).

SME (small-to-medium enterprises) Alliance Scotland, which supports companies battling against fraud, corruption and misconduct in the financial sector has already expressed disgust that nobody has been called to account over complaints about how RBS treated small business customers.

In August, the City regulatorconfirmed that the part taxpayer-owned Edinburgh-based bank and its senior managers would not face disciplinary action over the treatment of small firms.


The FCA said it had concluded that its powers to discipline anyone for misconduct do not apply and added that action against senior management in the GRG for lack of fitness and propriety "would not have reasonable prospects of success".

A preliminary FCA report found “certain widespread inappropriate treatment of SME customers” that “should also be considered to be systematic”.

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The FCA later said it had taken independent, external legal advice on its decisions, which found that GRG's activities were not within its remit and confirmed "the FCA's conclusions are correct and reasonable".

It came just three days after the Crown Office said there was no basis for criminal action over complaints about the defunct GRG which repeatedly faced claims that it deliberately forced small businesses to the brink of collapse so it could profit from their demise by selling off their properties. RBS has always denied the claims.


Mr Mitchell's case is set to reopen one of the longest-running and most painful periods in the bank’s recent history with RBS setting aside £400m to compensate thousands of small businesses that say they were mistreated by GRG.

As of August, of the 16,000 firms eligible, RBS said it had received 1,230 complaints as well as a further 165 from customers outside of the scheme’s scope.

GRG handled some 12,000 troubled small firms between 2007 and 2012 alone.

RBS's former chief executive, Sir Fred Goodwin, who would subsequently become a poster-boy for the 2008 financial crisis and RBS's implosion resulting in a taxpayer bail out, apologised for his part in the disaster, was stripped of his knighthood, but was never prosecuted.

In 2016 after the £45bn taxpayer bailout prosecutors concluded there was insufficient evidence of criminal behaviour to bring charges against the bank or any of its directors.

The FCA said: "We will not comment on the application seeking to review this decision while it is pending."

RBS which has declined to comment on the latest development, has previously said it was "deeply sorry" for its treatment of businesses in the GRG.

Mr Mitchell's will seek to manage claims against the bank brought by more than 500 former business customers of the GRG unit.

A high court judge last year dismissed a lawsuit Mitchell brought against RBS for its handling of his own former business Torex Retail. Mitchell said he would appeal the ruling.