At 12.00pm on 10 December 2019, Sir Ross Cranston delivered his eagerly anticipated report into the heavily criticised “Customer Review” that was established by Lloyds Banking Group (“LBG”) in the wake of HBOS criminal fraud scandal to deliver “fair” compensation to victims and which was overseen by Professor Russel Griggs, OBE (the “HBOS Customer Review”).

Sir Ross Cranston, a former High Court Judge, Solicitor General and MP, has been severely critical of LBG and the HBOS Customer Review.


In a withering attack, he found that:

  • There were “serious shortcomings” and “flaws” to the HBOS Customer Review.
  • That “…the methodology and process of the Customer Review did not achieve the purpose of delivering fair and reasonable offers of compensation”.
  • His sampling of cases “…demonstrated that the judgments made on individual customer cases have not always been fair and reasonable.”.
  • A “key finding” was that LBG did not make a single award for “direct and consequential loss” (“D&C” losses) – in other words business destruction.
  • This amounted to an “unacceptable denial of responsibility”.
  • It also sent a “damaging” message that destruction of businesses had nothing to do with the actions of the criminals and that all business failures and suffering were all of the customers’ own making.
  • There were various deficiencies in the way LBG determined whether individuals who were not formally appointed directors qualified for inclusion in the HBOS Customer Review.
  • LBG’s policy to writing off customers’ debts operated in a “discriminatory” manner.


Sir Ross’ “key” recommendation is that the process of assessing D&C (business destruction) losses “must be re-done” to put right the wrongs of the HBOS Customer Review.

As he acknowledges, the detail of that process needs to be carefully thought through as a result of a collaborative discussion with relevant stakeholders.

He has suggested as “one possibility” an “independent panel which would proceed in a non-legalistic manner to conduct the assessments”.

However, he has made quite clear that “certainly, the Bank should not conduct this revised D&C assessment”.

In addition to the re-assessment of D&C payments, Sir Ross has also recommended that:

  • LBG must reconsider all cases where an individual sought inclusion in the HBOS Customer Review on the basis that they were a de facto director or were otherwise involved in the running of the business.
  • In determining whether an individual was a de facto director or actively involved in the running of the business, LBG should take into account all relevant evidence, and give weight to the individual’s written statement and any corroborative statements of others involved in the running of the business at the relevant time.
  • Where an individual who is found to qualify for inclusion in the HBOS Customer Review in this way is a spouse or partner of another director of the business, in the absence of evidence to the contrary, LBG should consider each of them to have suffered the same or similar distress.
  • In line with this approach, LBG must reconsider customers’ eligibility for debt relief payments where such debt existed at the time of the HBOS Reading fraud, and that debt was subsequently repaid or refinanced before the commencement of the HBOS Customer Review.
  • For individuals, LBG must arrange for the reassessment of D&C losses by an independent body, on an opt-in basis, after agreeing the arrangements with key stakeholders. The principles underlying the structure (proposed at Appendix 2 of his report) must form part of the agreed revised D&C assessment process.
  • For a business, if any of its shareholders sought to make a claim in the course of the HBOS Customer Review LBG must arrange for the independent body (to be constituted in accordance with Recommendation 3.1 of his report) to conduct a D&C assessment.
  • LBG must release non-director shareholders (or any other third parties, including the companies themselves) who only received a QCS-fee refund from their settlement agreements.
  • LBG must write to the Treasury Select Committee providing an accurate picture of the use of settlement templates in the course of the HBOS Customer Review.
  • LBG must release customers opting into a revised D&C assessment from the relevant provisions of their settlement agreement.
  • LBG must undertake (i) not to bring or threaten to bring any breach of confidence claim under any clause in the settlements other than clause 4 of those agreements; and (ii) not to bring or threaten to bring any breach of contract claim in respect of customers sharing information under clauses 2.2 and 2.3 (save to the extent that the same would constitute a breach of clause 4).

LBG has previously confirmed that it will abide by the recommendations of Sir Ross’ report and it is to be hoped that it will now, finally, deliver fair compensation to all victims and bring closure to over a decade of suffering.


Michael Sparkes, Director of DS Law, solicitors to numerous HBOS victims, comments:

“The Griggs Review was a bitter and utterly depressing experience for victims of the fraud.

It is a huge relief that Sir Ross’s report takes Lloyds to task over the abject way in which it handled that review and demands that Lloyds re-assess victims’ claims for direct and consequential losses, most importantly those losses victims actually suffered as a result of the fraudsters’ destruction of their companies.

However, Sir Ross’ proposals for how the re-review should be conducted may not be appropriate for all victims, particularly those who, by virtue of the flaws in the Review process, are currently pursuing their claims through the courts.” 

Link to the Cranston Report

Link to The Cranston Review Website

DS Law is a specialist fraud and banking litigation firm which has advised a significant number of victims of the HBOS Reading banking scandal in their fight for fair compensation.

If you wish to discuss your case and how we can help you, then please contact Michael Sparkes and Gopi Binning on 020 7242 8018 or at /

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