We are now approaching the final stages of my Review into Lloyds Banking Group’s handling of the HBOS Reading affair.
I know that many of you affected by the HBOS Reading fraud have been frustrated at the length of time it has been taking.
My finished report will include a detailed explanation of the complexities involved in carrying out this inquiry, which we believe to be one of the largest independent financial inquiries ever conducted.
Clearly the COVID pandemic has affected progress, in particular our ability to schedule interviews as quickly as we would have liked to.
The interviewing process has been time-consuming for all concerned. Witnesses are entitled to legal representation, they have needed time to prepare and there are significant amounts of documentation involved. In addition, some witnesses live abroad, many have heavy commitments and, as a non-statutory inquiry, I do not have powers of compulsion. These and other factors have all impacted our ability to schedule interviews in a timely manner.
My report will also include details of the time-consuming process in gaining access to documents covered by legal professional privilege. These communications would not normally be provided to an inquiry. This material is highly sensitive and so the process for reviewing the documents has been complicated. This has also had a significant impact on the scheduling of interviews.
We now expect to finish the witness interviews during the course of the summer. LBG are also being asked to respond to specific questions that have arisen. I will then need to draw together the various strands of evidence to reach my final conclusions. This is a complicated process and we will be working as fast as possible to complete it.
I will submit my report to Lloyds Banking Group as soon as possible after this process has taken place.
Dame Linda Dobbs
I want to update witnesses and those affected by the HBOS Reading fraud about progress on my Review.
I had hoped that we would complete all the witness interviews by the middle of this year and that I would then be able to submit my report to Lloyds Banking Group as soon as possible after that.
Unfortunately, this has not proved possible. The interviewing process is now likely to run into the first quarter of next year. There are a number of reasons for this.
The COVID pandemic has inevitably affected the process and our ability to schedule interviews in a timely manner.
Unusually for an inquiry, we have been granted access to numerous documents covered by legal professional privilege, that is communications between lawyers and client which are protected by law (save in very limited circumstances) from disclosure. As the material is highly sensitive, the process for reviewing the documentation has been complicated, time consuming and has affected the scheduling of interviews.
The Dobbs Review is a non-statutory inquiry and I do not have powers to compel witnesses to give evidence. Furthermore, each witness is entitled to have legal representation. As such, interviews are necessarily scheduled taking into account the availability of the witness.
As I have explained before, I intend to include a detailed account in my report of the work involved in carrying out this inquiry, which I believe is one of the largest and most extensive of its kind.
However, I am fully aware that for those who were affected by the HBOS Reading fraud, the imperative is to have answers. Whilst I and my team are working to complete the Review as speedily as possible, we must ensure that we leave no stone unturned in the course of our inquiry.
Dame Linda Dobbs
Understandably, the victims of the HBOS Reading fraud, the witnesses who have given their time and energy to speak to the Dobbs Review and other interested parties are no doubt eager to know when my report into Lloyds Banking Group’s handling of the affair will be completed.
Subject to any constraints imposed by the government as a result of the COVID pandemic, I now expect that the interviewing of witnesses will be completed during the first half of 2021. I aim to submit my report as expeditiously as possible thereafter.
My report will include a detailed account of the work required in carrying out the Review so that readers can have a full understanding of what has been involved. As already noted, processing and analysing the voluminous documentation has been a complex, time-consuming, forensic process. To this day the Review is still receiving relevant documents. Some of the more recent substantial tranches of documentation are highly significant and may well have a material impact on my findings.
My aim is to finish the Review as speedily as possible. However, there can be no shortcuts if the investigation is to be thorough.
Those affected by the HBOS Reading fraud deserve no less.
Dame Linda Dobbs
We have received a number of enquiries recently from interested parties about the timing of the Dobbs Review. Consequently, I would like to give you an update on where we have got to in the process.
When I was appointed to carry out this Review, the expectation was that it would be a relatively short exercise which could be finished in a matter of months - and certainly well under a year.
As we set out on our work and the scale and scope of the undertaking became clearer, it was apparent that it would take much longer to conduct the inquiry.
The Dobbs Review covers a period of eight years from Lloyds Banking Group (LBG) acquiring HBOS in January 2009 until the conclusion of the criminal trial in January 2017. However, because our terms of reference require us to assess not only what LBG knew about the HBOS Reading affair, but also what it “should have known about through reasonable diligence”, we need to examine issues extending back well before 2009 and in some cases as far back as 2002.
Unlike the police investigation, Operation Hornet, which focused on a small number of specific examples of fraud at HBOS Reading and took about six years to bring to trial, the Dobbs Review is examining the treatment of approximately 80 businesses that came under HBOS Reading as well as the involvement of LBG during the Police investigation and other important issues.
I intend to give a detailed account of the work involved in carrying out the Review when I submit my report so that readers can have a full understanding of what has been involved. What I can say at this stage is that we have processed and analysed in excess of 150,000 documents, some running to hundreds of pages each. The Review is still receiving additional material. We have interviewed approximately 100 witnesses, including those affected by the HBOS Reading fraud as well as some of the police officers involved in Operation Hornet. The final stage of our work will be the interviews with LBG executives and employees. We hope to complete all the interviews this autumn.
There are more than 50 barristers working on the Review. However, due to the complexity of the inquiry, it has been necessary to interview witnesses in a logical sequence, to avoid having to go back to witnesses for further evidence.
This has inevitably affected the timing. Each interview takes considerable preparation. For obvious reasons, we needed to interview complainant witnesses and the police before interviewing LBG executives and employees.
The timing of some of these interviews is outside our control. However, we still aim to submit our report to LBG during the winter of 2020.
I am conscious that people want answers to the questions we have been asked to address. Our intention has always been to finish our work as soon as possible, consistent with doing a thorough job. Anything less would be a disservice to those affected by the HBOS Reading fraud to whom I am extremely grateful for their understanding, patience and assistance.
Dame Linda Dobbs