RBS facing threat of UK class action over £12b rights issue
LONDON: Royal Bank of Scotland (RBS) could face a class action lawsuit in the UK courts as a number of British investors are understood to be mulling a joint challenge.
It is believed a group of mostly institutional investors are looking into launching a case early next year amid continued question marks over RBS's decision to tap investors for £12 billion shortly before it went cap in hand to the government for a taxpayer bail-out.
RBS is the subject of several class action cases in the US but, until now, UK investors have pursued their grievances individually or sought to take action across the Atlantic where it is thought such actions are easier to win.
If the case goes ahead, it would be the first time the bank would face a combined lawsuit from a number investors in the British courts. In America, class action cases have grown increasingly popular over the past few years as they are considered a more cost-efficient way of bringing a case on behalf of a significant number of claimants.
RBS did not answer calls for comment yesterday but according to one Sunday newspaper, any case is likely to be led by Andrew Onslow QC, a top financial services barrister in London.
Until now, angry UK investors have preferred to pursue the bank through the American courts as it is believed the Financial Services and Markets Act would make it difficult to bring about a class action in this country. However, investors are now examining the grounds for bringing a case focused on the £12bn rights issue in 2008.
Among the cases in America, two UK local authority pension funds have appointed Cherie Blair to pursue RBS for compensation after they were left nursing "massive" losses when the bank was nationalised.
The wife of former prime minister Tony Blair is acting on behalf of North Yorkshire and Merseyside council pension funds.
Banking chiefs are considering giving shareholders a chance to vote on the size of their bonus pools as financial institutions seek to diffuse tension with the coalition government over pay-outs. - PB News