Things have been so busy this year for SME Alliance and our Calendar just keeps on filling up! So much so in fact that due to the sheer volume of email traffic we receive, we’ve had to introduce a second email address for people to get in contact. Some of you may have noticed that our most recent newsletter, updates and event invitations have been coming to you from firstname.lastname@example.org instead of email@example.com. Our office email is run by Sophie and Laura and will handle membership, events, newsletters and updates from now on to and our original email account will still be used for direct correspondence with Nikki. If you haven’t received any emails from our new address, please check in your spam/junk folder as the logo attachment may register as junk with your service provider.
We have so much going on and it’s very important to us that we share that information with our members regularly so please do check as we don’t want anyone to miss out.
On a side note, remember to buy your tickets for our up and coming Summer Networking Event! All event enquiries in regards to our Event can be sent to Sophie at firstname.lastname@example.org and tickets can be purchased via the links below (members receive a 20% discount, so please get in touch for your discount code):
Yesterday turned out to be an exercise in how to make friends and influence people – NOT! I wrote the speech below to deliver at the APPG on Fair Business Banking at Parliament yesterday and, even although the subject of yesterdays meeting was Insolvency, IPs and Vulture Funds, it didn't occur to me many of the people present to listen to this speech
would be IPs! Hey ho. It was actually very interesting listening to what they had to say and the meeting posed some interesting questions which I think we should collectively debate at our meeting on 17th August.
Congratulations Theresa and please add SMEs to those you will be championing.
Whether people are for Remain or Brexit and what ever your political persuasion, it is obviously a good thing that after all the turbulent events of the last few weeks the Country does have a new Prime Minister. Whether or not you like Theresa May I think everyone would agree she has a very hard task in front of her and one which will only be made more difficult if the endless political bickering continues.
I listened to her speech yesterday which seems to indicate a change in direction for the Conservative party away from the elitest minority and in favour of society at large - here's hoping! However, I was slightly disappointed that the SME sector did not get a mention in the list of those the Prime Minister will be championing. This is possibly because she, like many other MPs, is not aware of the inequitable battle many SMEs are having to fight against some financial institutions - or of
how, in a democratic country, the majority of small business owners currently have little or no 'access to justice'.
Therefore I have sent the letter below to the new Prime Minister. I have sent it from the members but I haven't added the word 'all' the members of SME Alliance because, as with Brexit, it may be some people will not be in agreement with the congratulatory sentiment. But I am hopeful Theresa May will take on board the fact SMEs need support - and if we
didn't write, she wouldn't know why this is so important.
Members will perhaps have read the open letter I sent to Scotland’s First Minister, Nicola Sturgeon, in March. The content of that letter can be read on the website under public interest but the emphasis was on the lack of any discernible effort by the police and prosecuting authorities to take any action on complaints made by victims of alleged fraud committed by banks. Banks’ actions resulted in these victims losing very significant amounts of money and in some cases their homes, businesses and every material possession they owned as a consequence of the avarice and criminality of the banks, particularly RBS
I received an underwhelming response from Sturgeon’s office to advise me that my letter had been sent to the Crown Office for comment.
I subsequently received 2 letters from Crown Office, one dated 7th April and the second dated 26th April which indicated that the Crown Office would continue to consider and review my case on receipt of any new and additional information which I or anyone else submitted.
In Scotland, the definition of fraud is much simpler than the multitude of sections outlined in the Fraud Act 2006, which is applicable in England and Wales. The Scottish definition is fraud is an offence at common law and is the bringing about of some definite practical result by means of false pretences and requires to be proved by corroborative evidence.
The last three words have for me been the main stumbling block for bringing a prosecution in Scotland and the reason for my publicising my case in order to attract others in Scotland in the same position. I did manage to meet with six others in November last year, four of whom made complaints to Police Scotland intimating that they believed they had been defrauded by RBS. It would appear that Police Scotland did nothing thereafter to follow up on these complaints.
This prompted me to respond to the Crown Office to advise that four complainants had come forward with information that could provide corroboration for my complaint but that they had heard nothing further from either Police Scotland or the Crown Office.
As a consequence of my letter, I had a subsequent telephone conversation with the deputy head of Serious & Organised Crime Division of the Crown Office who gave me an assurance that there was no hesitation by the Crown to pursue RBS, or indeed any bank, if complaints had been made which was supported by evidence that could be used to bring a criminal prosecution.
This attitude was a complete reversal to that which I had experienced in previous discussions with the prosecutors, and I think it is worth stating that there have been significant developments and changes concerning the Crown Office, since I started making my complaints.
There was widespread publicity concerning the Glasgow bin lorry accident in December 2014 with prosecutors very quick to publicise the fact that there was no evidence in their view to bring any criminal charges against the driver of the bin lorry.
A subsequent Public Enquiry last year found that the driver had deliberately lied and falsified his driving license application, withholding crucial medical information which would have denied him obtaining a license if disclosed. Accordingly, it would appear that he ought never to have been driving the lorry and his medical condition was responsible for his unconsciousness at the wheel.
The families of the victims of that crash launched an application for a private criminal prosecution following the publication of the results of the Public Enquiry and, despite repeated denial and objections from the Crown Office that there was no evidence to proceed with a prosecution, it will be for Appeal Court judges to decide on the application. There have only been two private prosecutions allowed in Scotland in the last 100 years so it may well be that a precedent could be set if the Appeal Court allow this to proceed. The decision will be made in the Autumn.
May brought a Scottish Parliamentary election and I was privately informed prior to the election that the First Minister was not satisfied with the ability of the Lord Advocate, the chief prosecutor in Scotland, most specifically for his handling and denial of culpability in the approach taken by the Crown Office in the bin lorry case.
Before the election, the Lord Advocate, presumably seeing the writing on the wall, tendered his resignation, and a new Lord Advocate, James Wolffe QC was appointed by the First Minister in June.
From my recent dealings with the Crown Office, it would appear that there is a very significant change of attitude in its approach to the complaints I and my Scottish colleagues have made. This has been most encouraging, specifically the confirmation I was given that firm instructions have been given to the police by the Crown Office to undertake investigations following the complaints and also the very strong assurance given to me that the Crown Office was committed to pursue the banks if the evidence warranted prosecution.
I believe this change is attributable to the new Lord Advocate and perhaps some comments from the Scottish Government to Crown Office about the banking sector that continues to receive bad publicity, particularly with criminal convictions now being handed out both in UK and other parts of the world including the USA.
It now remains to be seen if the police will undertake a wide ranging investigation and collect sufficient evidence of corroboration of my complaint to bring forward prosecutions against named individuals in RBS and the Bank itself.
We can all but hope, and applaud the police interviews commencing next week.
Nigel K Henderson
Following on from our latest newsletter, many people have asked for some guidance on what constitutes criminality or dishonesty. I felt co-director Andy would be the best person to answer this as he is an ex police officer who now investigates fraud and banking issues on a regular basis. He has kindly sent the following guide lines:
The standard common law test of criminal liability is usually expressed in the Latin phrase, ‘actus reus’ non facit reum nisi mens sit rea, which means "the act is not culpable unless the mind is guilty".
The intention or knowledge of wrongdoing that constitutes part of a crime is known as ‘Mens Rae’.
‘Mens Rea’ in criminal law is concerned with the state of mind of the defendant. Crimes will ordinarily require proof of ‘Mens Rea’.
The above may sound like double-dutch, but dishonestly is something that has to be tested to establish whether a crime has been committed.
Testing for dishonesty:
For example: If a person took your bicycle from outside of your home and rode off, would that be a crime? The answer is, perhaps! – It all depends why they took your bike? i.e. their state of mind (Mens Rae) in doing so.
It may be that they had a good reason to borrow your bike and would be bring it back later. i.e. a friend that thought you would not mind. It may be someone with some mental incapacity who saw the shiny bike and did not realise they should not take it. However, the person may also be a criminal who dishonestly intended to take your bike, without your consent with the intention of selling it and keeping the money, in which case dishonesty / their dishonesty makes it a crime.
Determining the dishonesty proof could be that later the person is caught selling your bike to someone else.
English law uses the 1982 Regina V Gosh case to create a test now called the ‘Gosh test’ where a persons Mens Rae is tested for dishonesty. The dishonesty test must be both subjective and objective.
1. Was the act one that an ordinary decent person (normally considered to be the ‘The man on the Clapham omnibus’) would consider to be dishonest? (the objective test) If so :
2. Must the accused have realised that what he was doing was, by those standards, dishonest? (the subjective test)
Note that it is not essential for a person to admit that they acted in a way that they knew to be dishonest, it is probably enough that they knew others would think their behaviour was dishonest, or that they thought that what they were doing was ‘wrong’.
For example: if you used money from the church collection box to buy your lunch, the jury at court would be asked if ordinary people regarded that to be dishonest, and if so, did you know that ordinary people thought that way.
Practical examples - honest error or dishonest behaviour:
Once again this all sounds complex, but in practical terms, looking at bank Manager behaviours it all begins to make sense:
Assume that the following are provable:
1) A signature on a Personal Guarantee document has been falsified by a bank manager, making the person falsely named, liable for the amount on the PG – Banker honest error or dishonest?
2) A Credit Team Manager writes a false risk and financial status report about a business, claiming it is insolvent when he knows it is healthy. Honest error or dishonest?
3) A property valuation instruction from the banker that a property must be valued as a distressed property, when in reality the property is not distressed. – Honest or dishonest?
4) A bank manager does a loan presentation to a customer which is deliberately misleading after which the customer agrees to something he would not have agreed to had he known the truth. Honest or dishonest?
5) A bank manager lies in court or in statements to the court. Honest or dishonest?
6) A customer record is falsified and provided to the IRHP Review team which prevents the customer from obtaining their due compensation. Honest or dishonest?
The basis of deciding dishonestly in these cases is relatively simple as the fact speak for themselves. The Bank manager is an ‘expert banker’ and therefore knows the difference between what is right and what is wrong. The above examples are all dishonest, almost by definition.
However in the above cases, to prove the dishonesty – evidence of what is stated is clearly required:
1) The signature is tested and found to be false, - ink dating / handwriting expert the customer was out of the country on that date etc.
2) There is evidence of the business solvency and that the manager knew it. E.g. accounts provided to the Manager, an email from the manager stating that he is pleased with the business performance.
3) The Manager knows the business is solvent, repaying its loans, the property is sound and similar properties are valued higher, and or the property in question had been recently valued with provably no deterioration which would cause a large drop in value.
4) The loan presentation omits or includes vital information which the bank manager knows he should have stated or should not have stated e.g. That interest rates were in decline but he says they were about to increase dramatically when he knew this not to be the case. OR that some caveat will be introduced later in the process when the customer cannot obtain alternative finance.
5) The manager lies about facts, evidence of which he fails to disclose at the time and or which later become known by the customer / court.
6) The customer may have their original customer record. The customer may be able to prove the falsity of what was provided to the IRHP team by the banker.
So when looking at your cases for dishonestly ask yourselves the following questions:
· Gut instinct - Was what happened mere mistake(s) or something worse?
· Was it deliberate?
§ Can I prove it was deliberate by reference to written materials or recorded conversations?
· If it was deliberate, what did the bank gain or stand to gain?
· Did I lose anything, or was the banker behaviour reckless in that I could or would be likely to suffer financial loss?
o Would the banker have realised this?
o What evidence do I have of this?
· Is there anything I have which pinpoints dishonest behaviour that the banker would know was dishonest, whether by deliberate overt action or omission?
o For example in a live case, the banker was told by bank credit that in order for the customer to receive the proposed loan, the banker must obtain the customers agreement that his overdraft would be cost from £70K to £20K. The banker did not inform the customer of the proviso. The banker told credit that the customer understood and agreed to the proviso which was false. The loan was granted on the false assumption by bank credit that the customer had agreed to the provision. The customer went under after the bank cut their overdraft to £20K leaving them with no working capital. Had the customer known of the proviso to the loan, they would not have agreed to it and the loan would not have been advanced, but the customer’s business would have survived.
· Can I pinpoint who actually did these things to me or was it just – the bank?
In determining dishonestly, you must not rely on logical conclusion unless you have some real proof to back up the logic. I.e. You cannot add a series of events together and just assume that there was dishonesty involved without some tangible evidence on which to attach your logical conclusions. Mere supposition is not enough, because if there is any doubt whatsoever, they will get away with it.
Dishonesty has to be ‘individual’ responsibility in the end. i.e. a named banker!
To encourage you all, we have seen many instances of criminality which are documented so well by the bank (which does not bother to cover these things up) that there can be no doubt whatsoever that crimes have taken place.