Farage has strong legal grounds to sue NatWest because banking law forbids discrimination, claim experts

Finance experts claim that Nigel Farage has solid grounds for taking legal action against Coutts for closing his account after establishing that UK legislation makes it illegal for any bank or credit institution to discriminate against customers for their beliefs or political views – or indeed on the basis of sex, race, gender, religion or any other identity feature.

The Financial Conduct Authority, which is the City’s watchdog for the conduct of banks, today pointed to the relevant legislation which forbids discrimination, and for which it is responsible. It is Regulation 18 of the Payment Accounts Regulations 2019 – one of the EU retained laws from 2015 –  which states: “A credit institution must not discriminate against consumers legally resident in the United Kingdom by reason of their nationality or place of residence or by reason of sex, race, colour, ethnic or social origin, genetic features, language, religion or belief, political or any other opinion, membership of a national minority, property, birth, disability, age or sexual orientation when those consumers apply for or access a payment account.”

While the Payments Accounts Regulations relate to basic bank accounts and services, the FCA has other tough rules which cover the conduct of banks and the new consumer duty which means they have to give reason for closing customer accounts.  

A top finance lawyer told Reaction tonight: “This is dynamite as the legislation is loud and clear: Discrimination on any grounds is forbidden.”

He added: “This legislation suggests that Farage has an open and shut case to take legal action against Coutts, and NatWest, its owner, for the decision to close down his account.”

Farage has said he is considering suing the bank. 

Although Coutts had tried to defend its decision to close Farage’s account on commercial grounds, the former Ukip leader has been able to show that it was his political – and cultural views – which did not align with the “values” of the bank, which led to the closure. On Tuesday, Farage published the 36-page dossier which had been put together by Coutts into his banking affairs. 

This document – obtained through a “subject access request” showed that Coutts did not think continuing to bank with Farage was compatible with the bank given his publicly-stated views that were at odds with “our position as an inclusive organisation.” They referred to his friendship with ex-President Trump, his position on Brexit and even the fact that he retweeted a Ricky Gervais joke about trans women and his friendship with tennis player Novak Djokovic, who is opposed to Covid vaccinations, as evidence of his unsuitability. 

NatWest chief executive, Dame Alison Rose, has now apologised to Farage for the mishandling of his account. In a letter to him, Rose said she was sorry for the “deeply inappropriate comments” made about him in internal emails, and said they did not reflect the view of the bank.

Earlier in the week the FCA’s chief executive, Nikhil Rathi, told the Treasury Select Committee that the watchdog is now in contact with senior figures at NatWest and Coutts. He told MPs on the committee: ”We are talking to NatWest Group about this,” referring to the closure of the account because of Farage’s political views.

Rathi also made it abundantly clear that the existing rules forbid banks to discriminate on the basis of political views. “‘Banks are not able to discriminate on the basis of political views. The law is clear,” he added, referring to the payments account regulations. 

In response to questions from Danny Kruger MP, Rathi said that the first recourse of action for anyone who thought their bank had treated them unfairly was to complain to the Financial Ombudsman Service. The FOS service, he added, has the power to direct a bank to reopen or keep an account if it found grounds to do so. In the case of Coutts and Farage, it would be for the FOS to examine.

He added that there would be further reviews on politically exposed persons (PEPs), as these clients typically pose a much higher risk for banks.

The government is also working on introducing new legislation to ensure that banks give three months notice to customers rather than one as well as greater powers to revoke their licenses.

Following an onslaught of criticism, Coutts put out another statement this week claiming that political and personal reasons were not the only reason for closing Farage’s account. It said: “We recognise the substantial interest in this case. We cannot comment on the details given our customer confidentiality obligations. However, it is not Coutts’ policy to close customer accounts solely on the basis of legally held political and personal views. Decisions to close an account are not taken lightly and involve a number of factors including commercial viability, reputational considerations, and legal and regulatory requirements.”

Yet the bank has still not explained the circumstances behind the report from the BBC and the FT earlier this month which suggested that Farage’s account had been closed for falling below the minimum £1m wealth threshold. Farage has asked for an apology from the BBC but none has yet been received.

As it stands, it looks as though it is well worth Farage pursuing the bank on legal grounds.

There is an irony, of course, if his case rests on EU retained law on the treatment of bank customers. Farage wanted all that law scrapped. Now it opens the way to legal restitution and revenge.

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