Lloyds to continue legal battle against charity

The banking group was told to pay more the money to the Lloyds TSB Foundation by the Court of Session last year.

But it emerged today that the banking group will appeal the decision at the Supreme Court in London.

The dispute centres around an historic agreement said to entitle the charitable foundation to a share of the bank’s profits.

It emerged today that the banking group is taking an appeal against the decision to the UK’s highest court, the Supreme Court in London.

The Foundation, which was set up in 1985 to support local community groups and describes itself as a community charity, branded the latest move “extremely disappointing” and said it would result in a delay in awarding grants to “hard-pressed” charities.

Chief executive Mary Craig said: “I would urge Lloyds to think carefully about pursuing this plan of action and to show their support for Scotland’s communities by withdrawing their appeal.

“I would also urge others to ask what lies behind this decision which is, at best, misguided and, at worst, ill-judged, oppressive and unnecessary.”

The Foundation went to court in a dispute over money it said it was due under a covenant entitling it to a share of Lloyds’ profits.

The row followed Lloyd’s acquisition of Halifax Bank of Scotland (HBOS) in 2009.

The banking group maintained that the Foundation was due £38,920 while the Foundation argued the correct sum was around £3.5 million.

Initially, the judge who heard the case, Lord Glennie, ruled against the Foundation. It appealed against that decision and ultimately won the case on December 29 last year following a fresh ruling by three senior judges.

Lloyds was ordered to pay £3,543,433 to the Foundation.

However, the banking group last week lodged papers with the Supreme Court, signalling its intention to appeal against the ruling.

Ms Craig said questions must be asked about the bank’s decision.

She said: “To have had a judgment in favour of our position with regard to the monies due to the Foundation from Lloyds Banking Group only to have them appeal at this late stage is extremely disappointing.

“Charities have had their hopes raised that we would be back in funds this year and this decision puts paid to that.

“Questions must now be asked as to why a major institution of its size, owned in part by the taxpayer, feels the need to pursue a charitable organisation in this way.

“Three judges, including the Lord President, Lord Hamilton, ruled unequivocally in favour of the Foundation at the end of 2011. The only outstanding matters remaining to be settled are that of costs and the rate of interest that Lloyds was to pay on what it owed to us.

“Despite that, today we now find ourselves back in limbo as Lloyds Banking Group seeks to tie us up in court action for at least another year, with additional legal costs and more time-wasting.

“But worse still, this shameful turn of events means that monies due to us will be held back for a third year until this further appeal is heard and decided - and that is money we should be awarding to Scotland’s hard-pressed charities, now and in the future, as they are crying out for support at this difficult time.

“If we don’t have that income, we will be limited in what we can give by way of grants for the foreseeable future.”

A spokeswoman for Lloyds Banking Group said: “We can confirm that we have decided to appeal the Inner House decision and have filed our notice of appeal with the Supreme Court in London.

“Lloyds Banking Group is proud of its track record as one of the largest corporate funders in the UK, including Scotland.

“Lloyds Banking Group has channelled over £82 million over the last 25 years to the Lloyds TSB Foundation for Scotland, supporting their work in some of the most disadvantaged communities in the UK.

“In addition, the Bank of Scotland Foundation is now well established and we will remain committed to being one of the largest contributors to Scotland’s charities for the long term.”

It is expected that it will take several months before the case is heard by the Supreme Court.

A spokesman for the court said: “I can confirm papers were lodged last Thursday in this case. We’l