Back in August Belfast High Court found that Bank of Scotland has been unfairly double billing customers who fell behind on their mortgages.
The case itself focused on the way Bank of Scotland added arrears to the original mortgage borrowing, a process known as capitalisation.
But Bank of Scotland, which had been appealing the verdict, has now taken the decision to drop its appeal.
And the BBC reports that Larkin as saying the original judgement was "unduly tender" on the bank.
He added that there was evidence of "criminal fraud under the 2006 Act" and that the matter has now been drawn to the attention of the police.
A barrister for the bank, Stephen Shaw QC, told the BBC that Larkin's view of the matter was "based on a misapprehension".
In Lloyds spokesperson added: “We no longer believe that an appeal is necessary in this case and as such have withdrawn from the appeal process.
"We would reiterate that repossession is always a last resort.
"We work hard to ensure that we are providing customers facing financial difficulty with the right support to help ease their circumstances and ultimately help to resolve the situation in what we appreciate is an extremely sensitive time."
