Small businesses will be able to use a new, free and independent service to help them resolve disputes with their banks, in a boost for SMEs with the launch of the Business Banking Resolution Service (BBRS).

The BBRS is a dispute resolution service set up to resolve disputes between eligible small and medium-sized businesses and participating banks.  An Implementation Steering Group was established in January 2019, and it drove and oversaw the development of the service in line with the banking and finance industry’s commitment and agreed terms of reference.

The BBRS will use alternative dispute resolution techniques to settle unresolved complaints from larger SMEs with seven participating banks, who make up the majority of the business banking market.

It is hoped that the BBRS will give SMEs added confidence to take out loans and other business banking products and services knowing that, if something goes wrong, they have a route to independent resolution. An improved climate for investment will be much-needed as the economy seeks to recover.

The BBRS will work to settle unresolved complaints from customers of the financial institutions who have signed up. The banks are: Barclays Bank plc and Barclays Bank UK plc; Danske Bank; HSBC UK Bank plc; Lloyds Banking Group (Lloyds Bank plc and Bank of Scotland plc); NatWest Group (including The Royal Bank of Scotland Plc, National Westminster Bank plc, Coutts & Company and Ulster Bank Limited (Northern Ireland)) ; Santander UK plc; and Virgin Money (including Clydesdale Bank plc and Yorkshire Bank). It is hoped that more banks will join in future.

The BBRS offers an alternative to litigation, removing the cost and stress of going to court. Its decision-making is led by Alexandra Marks CBE, Chief Adjudicator and a Deputy High Court Judge, who will be able to decide cases on the basis of what is fair and reasonable in the particular circumstances of each case.

The service has been designed to be easy to access, empathetic and flexible in its approach. Each business using the BBRS will have a ‘Customer Champion’, who will act as a guide to the service and how to use it.

The service has already registered around 450 cases, 48 of which were taken into its 2020 Live Pilot. These cases have been through the initial stages of the BBRS process, and will be contacted by their Customer Champion with further information within the early weeks of the BBRS’ operation.

The BBRS will also be able in certain circumstances to consider cases that are ineligible under its rules where the bank and customer collectively agree, meaning the service has a wider scope than originally anticipated.

Overall, there are 6 million SMEs in the UK of which approximately 2 00,000 are larger SMEs who will fall within the BBRS’ turnover band. While uncertain economic circumstances make it difficult to predict how many contemporary complaints it might receive, the BBRS estimates that up to 5,000-6,000 cases will be registered over a three- year period for the historical scheme. The BBRS has engaged the Centre for Effective Dispute Resolution (CEDR) to provide flexible case-handling capacity to support the delivery of the service alongside the BBRS’ own in -house team.

The BBRS’ independent Chair, Lewis Shand Smith, said “I am delighted the service is now fully operational. The BBRS will enhance SME and banking relationships by giving larger SMEs a free and easy to use dispute resolution service. By working with us voluntarily to develop this independent service, the participating banks and SME business groups have made an important contribution to supporting economic recovery among small businesses. By restoring trust, it will give businesses the confidence to borrow, leading to an improved climate for investment.”

“The creation of this unique service has involved a rigorous process and a great deal of hard work by the BBRS team, SME representatives, the participating banks, and our broader stakeholders. The end result is a service that will make a real difference to businesses with unresolved banking complaints.”

“When we were beginning to set up the BBRS we knew our service would be an important new development for SMEs across the country, but covid -19 has added additional impetus. As UK businesses continue to adapt to the current challenges, the BBRS is poised to play its part in supporting a recovering business community.”

David Postings, Chief Executive of UK Finance, said “The launch of the BBRS today delivers a new resolution service that is trusted, transparent and fair and follows considerable positive engagement from all groups involved. The BBRS is a ground-breaking service for larger-sized SMEs, with an unparalleled scope, mandate and level of expertise. Now 99 per cent of small businesses will have access to this new resolution service or to the Financial Ombudsman Service.”

John Glen MP, Economic Secretary to the Treasury, said “We’re committed to helping small businesses to bounce back from this pandemic, protecting and creating jobs as they do so. The Business Banking Resolution Service wil l give businesses confidence to seek the finance they need to grow and thrive.”

Paul Scully MP, Minister for Small Business, Consumers and Labour Markets, said “It has been a testing year for so many of Britain’s small businesses, and we have undertaken unprecedented measures to keep alive the creativity, dynamism and entrepreneurial spirit which they bring to every sector of the economy and every community across the country.”

“Services like the BBRS will play a vital role in ensuring small business owners can access expert advice and have their voices heard, not only as we build back better from this pandemic but also well into the future.”

Dr Adam Marshall, Director General of the British Chambers of Commerce, said “For far too long, some businesses have faced a real struggle to resolve disputes with their banking provider. The launch of the Business Banking Resolution Service will give firms greater confidence that more of these issues can be successfully resolved.”

“The new service has an important role to play in ensuring that banks handle their business customers, including those who have been impacted by the pandemic, both efficiently and fairly. Access to such a service can also help provide more businesses with the confidence to apply for finance in the first place, in the knowledge that there is somewhere they can turn to if things go wrong.”

“Chambers of Commerce across the country will ensure that businesses in their local communities are aware of the BBRS – should the need arise to use its services.”

Martin McTague, FSB National Vice-Chair, said “Access to finance will be absolutely critical to small firms as the economy recovers. That’s why it’s been worrying to see some stuck between a rock and a hard place where redress is concerned: too big for the Financial Ombudsman Service, too small for the courts. We believe the BBRS can provide a meaningful option for these firms in the future. Delivery is key, and we’ll work closely with the service to ensure it is fulfilling its function effectively. We continue to urge all major financial lenders to sign up to the BBRS, resolving historical claims where possible as they do so.”

Jonathan Geldart, Director General of the IoD, said “The launch of the BBRS is an important step forward in the transparency and proper considered resolution of cases which have both hitherto been felt to have gone unanswered and future cases believed to be necessary. The impartiality and independence of the BBRS is essential in it being able to effectively discharge its duties to claimants. The IoD has been involved as a member of the independent steering group responsible for seeing through the creation and effective launch of this free service. The principles of transparency, independence and fairness underpin everything that the BBRS stands for and as such the IoD is supportive of the service as well as having full confidence in the leadership and officers within it who will be responsible for seeing that cases are heard and fair and equitable resolutions determined.”

Flora Hamilton, Director, Financial Services, CBI said “The CBI welcomes the launch of the BBRS having been involved in its development. SME banking disputes are an important issue for businesses and this new service will play a vital role in rebuilding trust between businesses and the banks that serve them. In the midst of the pandemic, coronavirus loans have provided a critical lifeline to businesses, with figures suggesting many of them have never borrowed before.”