More than 800 small businesses have now joined forces in a long-running legal fight against Clydesdale and Yorkshire bank after hundreds of new claimants have joined the claim.

Claims firm RGL Management, which is managing the legal action, said it has added another 436 claims on behalf of 266 small firms against Clydesdale, which is now part of Virgin Money, and its former owner, National Australia Bank (NAB).

The latest tranche – the biggest yet in the action so far – takes the total number of claims to 1,345, representing 823 small businesses, according to RGL.

The case, which has been running since 2017, relates to fixed-rate tailored business loans that Clydesdale and Yorkshire offered to small businesses between 2001 and 2012.

RGL alleges small firms were unfairly charged high break fees when they sought to end the loans early, while it also alleges the lender “deliberately and systematically” overpriced the interest rates on the loans without first informing customers.

It said the claims are expected to amount to hundreds of millions of pounds.

RGL said it believes about 6,500 small firms were sold the loans, which could still see thousands more join the action.

James Hayward, chief executive of RGL Management, said: “With this significant new wave of claims, the largest to date, we remain supremely confident in the strength of our case.

“There is irrefutable evidence which proves the bank’s unlawful treatment of its fixed rate loan customers and we are well on the way to securing them the compensation they deserve, which is in the hundreds of millions of pounds.”

Clydesdale and Yorkshire bank group CYBG was formed in 2016 after NAB divested its UK operations and was then renamed Virgin Money after a £1.6 billion takeover of Sir Richard Branson’s banking group.

A spokesman for Virgin Money said: “There is absolutely no merit in the allegations made in RGL’s claims, which involve four live claimants.

“Their case is weak and we remain confident of defending our position.”