Cranston Review Appeals

Review Appeal Q&A

Appeal Q&A: De facto directors and debt relief claims

1. What is the Cranston Review Appeals Process for de facto directors and debt relief claims?

The process offers customers an opportunity to appeal the Lloyds Banking Group’s (the Bank) decision on customers’ applications for claims to be assessed on the grounds that they were, or should have been treated as, de facto directors, and on their applications for debt relief.

2. Why has this process been established?

The creation of the Cranston Review Appeals Process follows publication of the Cranston Report in December 2019, in which Sir Ross Cranston made various recommendations which the Bank agreed to implement in full.

In April 2020, Sir Ross produced a second report and a further document clarifying some aspects of his recommendations. His reports are available on the Cranston Review website.

In particular, Sir Ross made recommendations in relation to de facto directors and debt relief, and the creation of an independent appeals process.

If you are not content with the decision that the Bank makes on your de facto director or debt relief claim, then you are entitled to appeal that decision via the Cranston Review Appeals Process.

3. How do I appeal?

Once the Bank has provided you with its final decision on your debt relief or de facto director claim, within 28 days of receiving the Bank’s decision you must notify the Bank and Rory Phillips KC of your intention to appeal and send to Rory Phillips KC all relevant documents and information in relation to your appeal. If you wish to appeal, you must agree first that the appeal decision in your case will be final and binding on you and on the Bank.

4. Do I need to submit any documents to Rory Phillips KC in order to appeal?

If you wish to appeal, you will need to provide Mr Phillips with all documents and information which you consider relevant to the appeal, including:

  1. all documents and information which were submitted to the Bank;
  2. the Bank’s decision letters and supporting documentation;
  3. copies of any other correspondence between you and the Bank; and
  4. any further material which you would like Mr Phillips to take into account, including, if possible, a short explanation of why you consider the Bank’s decision to be incorrect.

If there are any gaps in the material, Mr Phillips will request further information from you or the Bank.

5. Who will decide the outcome of my appeal?

The decision on each appeal will be made by Mr Phillips. He will be assisted in the decision-making process by a team comprising:

  1. Simon Kirkhope of FTI Consulting LLP (who assisted with the Cranston Review) and members of his team; and
  2. barristers from 3 Verulam Buildings, many of whom assisted with the Cranston Review.

6. How will my appeal be decided?

Once Mr Phillips has received your appeal documents, he and his team will consider those documents and any further material requested in order to determine whether the Bank’s decision should be upheld, overturned or varied.

In their work on each appeal, Mr Phillips and his team will have regard to:

  1. the recommendations made in the Cranston Report in relation to de facto directors and debt relief;
  2. the guidance given in the Cranston Report at paragraphs 15.31 to 15.38 (regarding de facto directors) and paragraphs 15.39 to 15.47 (regarding debt relief); and
  3. the further guidance given in the “Response to LBG’s request for clarification of Recommendations made in the Cranston Report” published by Sir Ross Cranston on 3 April 2020.

The Cranston Report is available here and the further guidance is available here.


Appeal Q&A: D&I compensation

1. What is the Cranston Review Appeals Process for D&I compensation?

The process provides customers who have received offers of distress and inconvenience compensation made by Lloyds Banking Group (the Bank) after the closure of the Customer Review on 03 May 2019 an opportunity to appeal.

2. Why has this Process been established?

The process has been established to ensure that any customer who is not content with the Bank’s final decision in relation to distress and inconvenience compensation made after 03 May 2019 is able to appeal that decision to Rory Phillips KC.

This appeals process forms part of the Bank’s work following the publication of the Cranston Report in December 2019 and a second report produced by Sir Ross Cranston in April 2020, which focused on the implementation of the Cranston Report’s principal recommendations.

In overseeing the appeals process and deciding the appeals, Mr Phillips will act independently of the Bank.

3. I received D&I compensation from the Bank during the Customer Review. Am I entitled to appeal through this process?

No, the Cranston Review Appeals Process for D&I compensation is only for customers who received a final offer of D&I compensation from the Bank after the closure of the Customer Review on 03 May 2019.

4. How do I appeal?

If you wish to appeal the Bank’s final decision, you must do so within 28 days of notification by the Bank of the appeals process. Within that time limit, you must:

  1. notify the Bank and Mr Phillips of your intention to appeal the decision;
  2. if you so wish, submit any information or documents which you would like Mr Phillips to take into account in support of the appeal; and
  3. confirm to the Bank and Mr Phillips that you have no objection to the Bank contacting other directors of your former business who participated in the Customer Review (“the Comparative Director”).

5. Who is the “Comparative Director”, and why is it necessary to contact them in relation to my D&I appeal?

For the purposes of the Cranston Review Appeals Process for D&I compensation, the “Comparative Director” is another director of your former business who participated in the Customer Review. Where you notify the Bank and Mr Phillips of your intention to appeal and confirm that you have no objection to the Bank contacting the Comparative Director, the Bank will contact the Comparative Director to seek their consent for the use of information they provided to the Customer Review and details of their Customer Review outcome as part of the appeal process.

Where a Comparative Director consents to the use of information they provided to the Customer Review and details of their Customer Review outcome, the Bank will send Mr Phillips the relevant comparative information as soon as reasonably possible to be considered in the decision-making process.

6. Do I need to submit any documents to Rory Phillips KC in order to appeal?

As a starting point, the Bank must provide Mr Phillips with all documents and information which it considers relevant to the appeal. If you so wish, you may also submit any information or documents which you would like Mr Phillips to take into account in support of your appeal. If Mr Phillips considers that there are any gaps in the material provided to him, he may request further documents and/or information from the Bank or the customer, as he sees fit.

7. Who will decide the outcome of my appeal?

The decision on each appeal will be made by Mr Phillips. He will be assisted in the decision-making process by a team comprising:

  1. Simon Kirkhope of FTI Consulting LLP (who assisted with the Cranston Review) and members of his team; and
  2. barristers from 3 Verulam Buildings, many of whom assisted with the Cranston Review.

8. How will my appeal be decided?

Once Mr Phillips has received the material relevant to the appeal, he and his team will consider it and, on the basis of that material, Mr Phillips will undertake an assessment of the fairness of the Bank’s decision. In their work on each appeal, Mr Phillips and his team will have regard to the Cranston Report and Sir Ross’ recommendations and, where appropriate, to the following in particular:

(1) the analysis in the Cranston Report at:

  1. paragraphs 15.23 to 15.30 (regarding the methodology for compensation for distress and inconvenience);
  2. paragraph 15.37 (which confirms that the distress and inconvenience assessment matrix should be applied to customers who were actively involved in the running of the business at the time it was in ‘IAR’);
  3. paragraph 15.38 (which confirms that in undertaking the distress and inconvenience assessment, where the customer is a spouse or partner of a director of the business, the approach adopted by Professor Griggs should be applied);

and

(2) recommendation 1.3 of the Cranston Report (which states that where an individual is a spouse or partner of another director of the business, in the absence of evidence to the contrary, the Bank should consider each of them to have suffered the same or similar distress).

and

(3) the need to ensure that newly assessed customers are not treated less favourably than those who received compensation from the Bank for distress and inconvenience, during the Customer Review process.

9. What are the possible outcomes of my appeal?

If Mr Phillips concludes that the Bank’s decision is fair, that is the final decision, and is binding on both you and the Bank.

If Mr Phillips concludes that the offer of compensation is not fair, then:

  1. You and the Bank will be notified of this decision in writing.
  2. The Bank will be directed to re-calculate the compensation offer within 14 days.
  3. Mr Phillips will assess the fairness of the re-calculated offer.
  4. If Mr Phillips concludes that the re-calculated offer is fair, that is the final decision on the appeal and shall be binding on both you and the Bank.
  5. If Mr Phillips concludes that the re-calculated offer is still not fair, the process will be repeated.

Appeal Q&A: General information

1. Will the outcome of the appeal be final?

The decision on each appeal shall be final, and binding on both the Bank and the customer.

2. Does the Bank have any influence over the Cranston Review Appeals Process?

The Cranston Review Appeals Process is wholly independent from the Bank. Mr Phillips will have full autonomy in deciding the outcome of each appeal.

3. How will I find out the outcome of my appeal?

Customers will be informed of the outcome of their appeal via email correspondence with Rory Phillips KC.

4. How can I contact the Cranston Review Appeals Process team?

The Cranston Review Appeals Process team is contactable via info@cranstonreviewappeals.com.