Settlement agreed over most claims against RBS

ACTION: Investors had taken bank to court over rights issue in 2008

A high-profile trial of an action by thousands of shareholders against Royal Bank of Scotland will not go ahead after settlement of the bulk of the claims.

At a hearing at the High Court in London yesterday, a judge was told that a settlement deal had been agreed by 87% “by value” of claimants.

Jonathan Nash QC, for the investors, said it was hoped and “anticipated” that the remaining “undecided” 13% would also accept the offer.

He applied to Mr Justice Hildyard for the trial to be “vacated” in the light of the latest development. His application was supported by a QC representing RBS.

The judge acceded to the request but left the door open for “restoration of the hearing” if negotiations failed to reach full settlement and some claimants decided they wished to pursue the litigation in court and had the means to do so.

The legal action centred on a rights issue overseen by former boss Fred Goodwin in April 2008 when RBS asked existing shareholders to pump £12 billion into the bank after leading a consortium that spent £49 billion on Dutch lender ABNAmro.

Shareholders claimed they were left nursing hefty losses following the cash call after RBS shares plunged 90% and the Government was forced to step in with a £45.5 billion bailout when the deal turned toxic.

A trial would have seen disgraced former chief executive Mr Goodwin, who was stripped of his knighthood following the bank’s near collapse, face questioning in court.

At the start of yesterday’s hearing Mr Nash announced that “87% by value of the claimants have either executed the settlement agreement or indicated their intention to do so”.

Of the remaining 13%, counsel said they needed “some further time to decide whether or not they wished to accept the offer”.

He added: “It is hoped – I think I can say anticipated – a significant part will accept the offer too.”

Mr Nash said there was no information that the undecided claimants wanted to go to trial “at this time”.

He said he wanted to make it “crystal clear” that his legal team had seen no evidence of funding being available.

RBS said in a statement: “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%.”

A spokesman for the RBS Shareholder Action Group said: “This settlement with RBS comes after many years of campaigning for compensation on behalf of those who lost out in 2008.

“In that time, we have been forced to endure many struggles, including having to fund and run an entire case when the other claimants settled early.

“Our decision and resolve to press on has been vindicated by this settlement, which is twice that accepted by others who had much greater resources than us.”