RBS court case delayed for third time

Lawyers representing 9,000 Royal Bank of Scotland shareholders have this morning secured an adjournment for the third successive day at the High Court in London.

Disgraced former chief executive Fred Goodwin and other former directors had been due to take the stand to defend their position that over how much they knew about the bank’s financial health in mid 2008, and whether they misled shareholders when they appealed to them for a £12 billion cash injection into the bank following what proved to be the catastrophic £49 billion deal to acquire Dutch bank ABN Amro.

The high profile case was meant to start on Monday and had already been delayed twice.

Separate factions within the shareholder group are understood to be unable to agree whether to accept an improved offer of £200m to settle claims they were misled about the strength of the bank’s finances before its near collapse when it had to be rescued with £45m of public money.

According to reports, most of the remaining claimants suing the Edinburgh-based bank, which include major entities such as Essex County Council and Wells Fargo Bank, are ready to settle for an improved offer of £200m.

However, groups representing some of the smaller claims are thought to be keen to fight the case.

The cost of the legal action already exceeds £100m and without the backing of the larger shareholders, smaller groups may struggle to find the financial resources to fight on alone.

In a brief hearing on Wednesday, Jonathan Nash QC, for the claimants, told the judge that “progress towards a settlement remains good”.

He added: “We remain hopeful it will be possible to reach a final compromise of the claims made in these proceedings.”

Both sides will attend court on Thursday for a short hearing to update the judge on further progress.

A previously scheduled break means the case is scheduled to resume on 7 June.

On Monday, at the outset of what was scheduled to be a 14 week trial, Mr Justice Hildyard agreed to the trial being put back a day for settlement negotiations to be continued.

RBS has already settled with 87 per cent of the investors who originally brought legal action against over the disastrous episode that saw the price of the shares purchased following the 2008 appeal for a capital injection crashing from £2 to just 11p.

Meanwhile, shareholder support organisation ShareSoc has called on the board of RBS to compensate all of its shareholders affected by its near collapse, not just those involved in the current expensive litigation, even though a ShareSoc spokesman admitted that he didn’t think there was a “cat’s chance in hell” the bank would do so.

Shareholders who did not settle with the bank after bringing a legal action against it, or are among the 9,000 private shareholders involved in the current action, are no longer allowed to sue the bank after a six-year statute of limitations passed in 2014.

A spokesman for ShareSoc said small shareholders that had not joined the RBoS action group, which cost £300 to join, “ought to be given the same settlement”.

He added: “That would be a sign of goodwill to rebuild the brand – penny pinching does nothing for the RBS brand. However, I don’t think there’s a cat’s chance in hell this will happen.”

An RBS spokeswoman said: “There is no allowance for shareholders who are not part of the litigation, and similarly those who have applied to join following the statute of limitation are time barred and not part of any settlement.”