BBRS: Resolving disputes is not a ‘one size fits all’ approach

By Sally Berlin, above, Chief Adjudicator, the Business Banking Resolution Service 

Generally, SMEs across the UK have good relationships with their banks, but there are times when issues inevitably arise. In many of these circumstances, banks and their SME customers can quickly work together to resolve disagreements. Sometimes, however, a neutral third party is needed to address SMEs’ complaints and help reach what might be a mutually beneficial agreement. This is what we call dispute resolution.

The Business Banking Resolution Service (BBRS) is a specialist service which provides a free, accessible, and independent service to resolve disputes between eligible SME businesses and seven participating high-street banks.

Complaints which we support SMEs to resolve might be complex and there is no one solution that works for everyone. We can rule in favour of SMEs or banks, but often find a solution which works for both parties. What makes this possible is that we have multiple routes to resolution, which include conciliation, mediation, adjudication and direct settlement.

SMEs are often unaware of the range of options available to help address their banking complaints, but we can utilise any of these routes based on a case’s individual requirements and complexities:

  1. Conciliation

Conciliation is an informal process, where an experienced facilitator will help an SME to reach an agreement with their bank without the need for investigative adjudication. The process is flexible and straightforward, with no set procedure, and enables the two parties to devise solutions unique to their situation and which meet their individual needs.

We explore this resolution approach at the beginning of many cases to establish if both parties might be open to making offers to settle. The conciliation process can happen quickly – sometimes within four weeks – and due to its unique and tailored approach, both parties have a high degree of control of the outcome.

  1. Mediation

By contrast, mediation is a more structured settlement process where an independent experienced mediator actively helps the SME and their bank come to a consensus on their own. A professional mediator works with each side to explore the interests underlying their positions. Like conciliation, this is a flexible process designed and managed by the mediator to suit both parties, in consultation with them.

Through mediation, the SME and the bank are given the opportunity to understand one another’s perspective and discuss the nature of the complaint in detail. It provides an opportunity for the customer to tell their story and the impact it has had on them, directly to the organisation they are complaining about. This will often entail a wider discussion about the dispute than would occur during the adjudicative case assessment process. At the same time, it provides the bank with an opportunity to explain how they understand the issue and give their perspective. Having fully understood each other, the parties can develop a settlement that meets their needs.

Within this process, both parties are given the agency to agree on solutions unique to their individual circumstances, many of which would not be possible in a formal, adjudicative case assessment process.

  1. Adjudication

If conciliation or mediation are not possible, we will use our adjudication process to investigate complaints and resolve disputes. This is a more formal process, but differs from court-based resolutions. It looks at what is ‘fair and reasonable in the circumstances’ rather than focusing on what is ‘unlawful’.

Through the adjudication process, both the SME and the bank will submit formal comments and evidence to support their positions. This is a transparent process and the parties have the opportunity to see and respond to one another’s evidence, before the evidence is considered by an independent and impartial case assessor. All evidence is studied and evaluated, resulting in a fair and reasonable assessment of the complaint. The assessor will then make an independent adjudication on how the situation should be resolved. The determination will only become binding if it is accepted by the SME complainant. Either party may appeal.

  1. Direct settlement

At any point during the dispute resolution process, we enable SMEs and banks to settle their dispute informally and outside of the dispute resolution process. This is particularly common when new evidence comes to light or when the complainant’s perspective has been better understood. To date, the BBRS has seen a significant proportion of eligible complaints settled privately between the SME and the bank.

SMEs urged to check their eligibility

To date, over £1M has been awarded or settled to be paid to SMEs as a result of BBRS involvement, across these various dispute resolution routes. Where cases evolved to direct settlement, we are not always party to the redress sum that is agreed, and so this figure is likely to be significantly higher.

Some SMEs we have helped have walked away with life changing sums of money. Some have received non-financial awards that have had a transformational impact. Our range of dispute resolution options allows us to deliver significant non-monetary redress, such as discharging people from personal guarantees, changing loan exit fee penalties and changing customer loan terms.

Our Scheme covers banking complaints for the period from 1 April 2019 onwards. SMEs with an annual turnover up to £10M per annum, balance sheet total of up to £7.5M and, importantly, which are not eligible to take their complaint to the Financial Ombudsman Service, can access our services. We urge all SMEs who think they have a business banking complaint to visit our website to check whether they are eligible and to see if we can help.