RBS hit with £100m legal bill for fight against rights issue class action

The Edinburgh-based banking giant has been fighting a class action led by the RBS Shareholder Action Group over the affair.

According to The Times, which cites court filings by RBS’s lawyers Herbert Smith Freehills, this effort has so far cost the bank £86.2 million.

Once VAT is added, the cost totals £103.4 million.

The revelation comes in the same week that RBS agreed to pay $1.1bn (£845m) to settle two lawsuits in the US over the sale of toxic residential mortgage-backed securities in a move that is expected to mark just the start of its legal costs over the affair.

While RBS still faces a number of other civil lawsuits and criminal investigations in the US surrounding the sale of the securities that played a central role in the financial crisis of 2008, back in the UK, around 27,000 retail investors are suing the bank for £4 billion, alongside institutions including Axa and Aberdeen Asset Management.

They claim they were misled into supporting a £12 billion emergency fundraising in April 2008, six months before RBS was bailed out by the Government.

The case has been filed against disgraced former chief executive Fred Goodwin, former chairman Sir Tom McKillop, former finance director Guy Whittaker and former head of RBS’s investment bank Johnny Cameron.

An RBS spokesman told The Times: “We continue to strongly contest these claims.”

Herbert Smith Freehills and the RBS Shareholder Action Group declined to comment.