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| RBS court case called off but some investors still refuse settlement | RBS court case called off but some investors still refuse settlement |
| (35 minutes later) | |
| A high court judge has agreed to call off a landmark case that would have forced Fred Goodwin to give evidence, but has left the door open for diehard investors to revive proceedings against Royal Bank of Scotland next month. | A high court judge has agreed to call off a landmark case that would have forced Fred Goodwin to give evidence, but has left the door open for diehard investors to revive proceedings against Royal Bank of Scotland next month. |
| The case – in which investors claimed they were misled by the former RBS boss, three former directors and the bank itself during a £12bn cash call in April 2008 – had been due to start on 22 May but a last-minute settlement offer from RBS saw a series of adjournments. | The case – in which investors claimed they were misled by the former RBS boss, three former directors and the bank itself during a £12bn cash call in April 2008 – had been due to start on 22 May but a last-minute settlement offer from RBS saw a series of adjournments. |
| During a complex hearing on Wednesday, a high court judge, Mr Justice Hildyard, called for a review of the way such complex lawsuits are brought in the future. | During a complex hearing on Wednesday, a high court judge, Mr Justice Hildyard, called for a review of the way such complex lawsuits are brought in the future. |
| He had been told by Jonathan Nash, the QC for 9,000 private investors and a handful of major institutions bringing the legal action, that the case should not proceed – in legal terms “vacated” – after 87% of the shareholder group settled with the bailed-out bank or said they intended to. | He had been told by Jonathan Nash, the QC for 9,000 private investors and a handful of major institutions bringing the legal action, that the case should not proceed – in legal terms “vacated” – after 87% of the shareholder group settled with the bailed-out bank or said they intended to. |
| The judge has called for the remaining 13% of investors to agree to sign up by 20 June and sign up formally by 4 July, or to tell the court by the end of July if they want to resume the trial. To do so, they would need to prove they have the funding to go ahead. | |
| “This solution is, perhaps, I hesitate to use the word ‘impure’, but nevertheless an unusual one,” said Hildyard, who referred to the fact that the case had been going on for four years. | “This solution is, perhaps, I hesitate to use the word ‘impure’, but nevertheless an unusual one,” said Hildyard, who referred to the fact that the case had been going on for four years. |
| “In a difficult and novel situation, the process of bringing an end is not as easy as might be thought,” he added. | “In a difficult and novel situation, the process of bringing an end is not as easy as might be thought,” he added. |
| The court was told the RBS Action Group, representing thousands of retail investors, had agreed to the settlement. Nash said he expected a significant number of the 13% yet to sign up would do so. | |
| The bailed-out bank offered to double the amount of compensation agreed with shareholders who lost out when they backed the rights issue, which took place six months before the £45bn taxpayer bailout. | The bailed-out bank offered to double the amount of compensation agreed with shareholders who lost out when they backed the rights issue, which took place six months before the £45bn taxpayer bailout. |
| Outside the court RBS, which has spent £1bn keeping the case out of court, said: “87% of the remaining claimants by value have accepted the settlement offer and the trial has now been vacated. This includes the action group, which represents the individual retail claimants. | Outside the court RBS, which has spent £1bn keeping the case out of court, said: “87% of the remaining claimants by value have accepted the settlement offer and the trial has now been vacated. This includes the action group, which represents the individual retail claimants. |
| “The offer remains open for acceptance for a short period to the further 13%. It was made clear today in court that this delay is the result of procedural issues. None of the outstanding claimants have indicated any intention to continue the claim.” | “The offer remains open for acceptance for a short period to the further 13%. It was made clear today in court that this delay is the result of procedural issues. None of the outstanding claimants have indicated any intention to continue the claim.” |
| While Goodwin now looks likely to escape a court hearing, Rachel Reeves, who was a Labour MP on the Treasury select committee before the election was called, raised the prospect of the former RBS chief executive being called to parliament again. | |
| “A lot of questions remain that he should be held accountable for. When parliament returns, this might be something for the Treasury select committee to look into,” she told City AM. | |
| The last time Goodwin was called on to account for his action at RBS in public was when he gave evidence to MPs in February 2009 and offered a “profound and unqualified apology for all of the distress that has been caused”. | The last time Goodwin was called on to account for his action at RBS in public was when he gave evidence to MPs in February 2009 and offered a “profound and unqualified apology for all of the distress that has been caused”. |
| The settlement of the long-running legal battle has cost RBS about £900m, with another £100m in legal fees. | The settlement of the long-running legal battle has cost RBS about £900m, with another £100m in legal fees. |