Lloyds Explores SME Compensation After HBOS Scandal

Lloyds moved closer with possible plans to compensate small businesses affected by the HBOS bribery scandal.

Reports Tuesday (March 21) said the bank has hired Professor Russell Griggs, a businessman and expert of bank reviews, to lead the independent review of the scandal and help decide whether Lloyds should compensate impacted SMEs.

According to Lloyds, Professor Griggs will be establishing “the scope, methodology and individual case outcomes of the review in order to ensure fair outcomes.”

The bank added that he had been “selected for his experience in overseing high-profiel reviews of a complex nature and for his clear understanding of small and medium enterprises, as well as his track record in ensuring the principles of fairness are followed in a number of joint government, banking and industry initiatives.”

Professor Griggs used to serve as chairman of the CBI U.K. SME Council and had previously reviewed a slew of bank closures at the request of the British Bankers’ Association, according to reports. His appointment follows weeks after six people were jailed last month for their participation in the HBOS scandal, in which employees of the bank created a turnaround consultancy and imposed fees and debts on SMEs. Some of those small businesses were also reportedly stripped of their assets, with several forced into bankruptcy.

The alleged scandal occurred before Lloyds acquired HBOS in 2009.

Last month MPs sent an open letter to Lloyds Chief Executive Antonio Horta-Osorio and Chairman Lord Blackwell calling on the bank to compensate the impacted small businesses.

“We are at a point where, once again, there are a large group of aggrieved business people who have lost their livelihoods,” said Chair of the Parliamentary Group George Kerevan MP in the letter to Lloyds. “Critically, many have endured years of financial duress and personal stress.”