Lloyds will reopen compensation claims for victims of the HBOS branch fraud in Reading after an independent review found the original scheme was “neither fair nor reasonable”.
The decision is an embarrassing U-turn for Lloyds, which closed its £100m-plus compensation scheme in the spring and has been trying to draw a line under one of Britain’s biggest banking scandals.
Sir Ross Cranston, a former high court judge who ran the independent inquiry, said the bank’s review of the fraud had “serious shortcomings”.
The most serious concerned Lloyds’ “approach to assessing direct and consequential loss caused by the criminal misconduct”, he said. “This part of the customer review, both in structure and in implementation, was neither fair nor reasonable.”