Compensation scheme that cost £23m to set up has yet to pay any redress
A compensation scheme for victims of banking scandals that cost millions of pounds to establish is yet to pay out even a penny in redress.
The Business Banking Resolution Service (BBRS), which was formed in 2019 and cost £23m to set up, has run up huge bills for staff and third-party advisers, but is yet to deliver any compensation.
The scheme was set up to give small and medium-sized businesses an independent view on banking disputes after companies were damaged by banking scandals.
After some teething issues the scheme went live in February, and is yet to pay out even a single penny to businesses.
The Times first reported that its highest paid director, Alexandra Marks, a high court judge, was paid £505,000 for 18 months’ work, while a further £9.2m was spent on “third-party delivery costs” to get the service up and running.
Legal costs for the scheme included £5.7m to Osborne Clarke, which advised the SME representatives who were involved in the set-up of the organisation, and more money was given to law firm Addleshaw Goddard, but those costs were settled elsewhere, meaning they were not included in the £23m tally.
Some £500,00 was spent on external public relations, and about £3.3m was spent on “integrating” charity the Centre for Effective Dispute Resolution, which will run the dispute resolution process.
Total staffing costs stood at £3.1m, with an average of 14 employees during the period.
The BBRS told The Times it was actively working on more than 160 cases, though it was unsure how many of those would be deemed eligible to be taken forward.
It added that salaries at the scheme were benchmarked to ensure they were in line with comparable organisations, “to ensure we can attract talented individuals to deliver fair outcomes for our customers.”