Lloyds misses own compensation deadline

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Victims of a one billion pound fraud have criticised Lloyds Banking Group for failing to meet its own deadline for paying compensation.

In the wake of guilty verdicts in a fraud trial that ended in February, Lloyds said it would offer compensation to the victims by the end of June.

However, now the deadline has arrived, only a small fraction of the £100m it set aside has so far been paid out.

Lloyds, which bought HBOS in 2009, has yet to comment.

In the HBOS fraud, two corrupt HBOS bankers pressured small business customers into hiring a firm of so-called turnaround consultants called Quayside Corporate Services, led by David Mills.

Mills and his accomplices bribed the bank managers with cash, gifts and prostitutes, then used their relationship with the bank to bully the business owners into handing over exorbitant fees and, eventually, control of their companies. Many business owners were not only ruined but lost their marriages and their health.

Mills and the others, including former HBOS banker Lynden Scourfield, were convicted in January of various charges of fraud, corruption and money laundering between 2003 and 2007.


After years of denying any knowledge of criminality, Lloyds Banking Group came under pressure to take responsibility for crimes committed by its own staff. On 27 April the bank said it would offer victims compensation by the end of June.

However, the victims say the bank’s compensation scheme isn’t impartial. Of the 64 who’ve joined it, it’s understood that fewer than 10 have received offers and only one settlement has been reached. Lloyds has yet to comment.

Dozens more victims have declined to join the scheme amid concern that the bank is seeking to dictate terms, imposing its own compensation scheme rather than consulting them.

The bank is expected to provide an update on its treatment of the victims of the crime later today.


Nigel Morgan, whose family lost millions and was driven into bankruptcy following the fraud, says the bank refused to help him with a modest sum to prepare a compensation claim. He says the bank has made no effort to try to reverse the bankruptcy and the trustee in bankruptcy now wants to control the claim for compensation.

“It’s been 12 years since we were ruined by this and a very tough 12 years. I thought the bank would be decent enough to admit when it was wrong – but the way they’re behaving to the victims is disgusting. The first thing they should have done is to send someone round and apologise unreservedly.

“We’re constantly living on the edge, worried we won’t keep what we have left; I’m having panic attacks every day. It’s just an awful situation.”

Supreme court finds Morrisons liable for employee’s crime at work

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Judgement in case involving attack at supermarket petrol station may make it easier for customers to sue businesses

Employers can be held responsible for crimes committed by staff at work, the Supreme Court has ruled in a case involving a Morrisons customer who was subjected to a violent, racist assault. The unanimous judgement by the UK’s highest court confirms the far-reaching consequences of the principle of “vicarious liability” – where someone is held liable for another’s acts – and may make it easier for aggrieved customers to sue businesses in future. The Supreme Court case developed out of a row on a Morrisons petrol station forecourt in Small Heath, Birmingham, in March 2008. The customer, Ahmed Mohamud, of Somali descent, had checked the air pressure in his tyres and then asked at the kiosk whether he could print off a document from a USB stick.Amjid Khan, the Morrisons employee, refused and ordered Mohamud to drive away using “foul, racist and threatening language”. Khan followed Mohamud outside, pulled open the car’s passenger door and punched the customer in the head.

Mohamud got out of his car but was knocked to the floor by Khan and repeatedly kicked. A Morrisons supervisor intervened and tried to prevent Khan from continuing the attack. Mohamud launched a claim for compensation against Morrisons. He has since died from an unrelated illness, but his family continued with the claim. Both the high court and court of appeal declared that Morrisons was not responsible, on the grounds that there was not a sufficiently close connection between what Khan was employed to do and his conduct in attacking Mohamud. But the Supreme Court judgement disagrees with that conclusion, saying it was wrong to “to regard Mr Khan as having metaphorically taken off his uniform the moment he stepped out from behind the counter”.

When Khan followed Mohamud to his car and told him “not to come back to the petrol station”, he had been giving an “order” and “purporting to act about his employer’s business”, said the supreme court justice, Lord Toulson. “It was a gross abuse of [Khan’s] position, but it was in connection with the business in which he was employed to serve customers,” Lord Toulson added. “His employers entrusted him with that position and it is just that, as between them and the claimant, they should be held responsible for their employee’s abuse of it. “Mr Khan’s motive is irrelevant. It looks obvious that he was motivated by personal racism rather than a desire to benefit his employer’s business, but that is neither here nor there.”

Commenting on the implications of the ruling, Chris Weaver, an employment solicitor at the law firm Payne Hicks Beach, said: “This is a significant judgement by the Supreme Court, but the law of vicarious liability has not changed. “It remains the case that there must be a sufficiently close connection between an employee’s wrongdoing and the employment such that it is fair to hold the employer liable. But the question will turn on the particular facts of any given case.”


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