A court decision ordering Lloyds Banking Group to pay £3.5 million to an independent grant-making trust has been welcomed as “great news” for charities in Aberdeenshire.
The Lloyds TSB Foundation for Scotland had raised an action in the Court of Session against the Lloyds Banking Group, following a dispute over the money it was due from the group under the terms of a covenant entitling it to a share of profits.
The Foundation – which last year made five grant awards, totalling £26,549, to charities in Aberdeenshire – is entitled under the covenant to a share of one per cent of the banking group’s pre-tax profits on an annual basis.
However, last year it was forced to mount a legal challenge against the banking group’s re-interpretation of the covenant. Lloyds had claimed the Foundation was due only £38,920, while the Foundation maintained the correct sum was more than £3.5 million.
After the first hearing, Lord Glennie ruled against the Foundation but three appeal judges overturned the decision and ordered Lloyds Banking Group to pay it £3,543,433 million.
Welcoming the decision, Mary Craig, the Foundation’s chief executive, said: “This is great news for Scotland’s hard-pressed charities at a time when many are struggling.
“The court’s decision is extremely welcome and shows that the Foundation’s trustees were right not to accept the original finding.
“Since 1985 the Foundation has made more than 12,000 awards, totalling almost £85 million, to charities in Aberdeenshire and across Scotland, and since 1997, we have allocated around £30 million to support charities – and therefore jobs – in the charitable sector.
“This decision will help us considerably to carry on with our work supporting charities throughout Scotland which are clearly focused on improving the quality of life for people who are disadvantaged or at risk of becoming so.”
Last month’s decision in favour of the Foundation was taken by Scotland’s senior judge, the Lord President, Lord Hamilton, sitting with Lord Carloway and Lord Kingarth.
Charities which would like more information about applying to Lloyds TSB Foundation for Scotland for an award should contact the Foundation on 0131 444 4020.