Several Lloyds Banking Group institutional clients have instructed Mishcon de Reya after breaking away from the shareholder action group involved in a multi-billion pound court battle against the Royal Bank of Scotland (RBS).
The nine claimants have left the RBS Shareholder Action group which continues to be represented by Signature Litigation.
The action is brought against the bank’s former chief executive Fred Goodwin and three other directors, and relates to a rights issue in April 2008, in which RBS sold its shares at £2 per share. The claimants allege that the prospectus on which the rights issue was based was ‘defective’ and contained material misstatements and omissions.
The nine pension investment subsidiaries are suing Government-owned RBS for £420m in damages through nine of its pensions and investment management subsidiaries, in what is considered the first class-action style dispute in the English courts. Having gone on the record in court last week, Mishcon de Reya disputes partner Richard Leedham is now leading the case for claimants connected to Lloyds Banking Group.
Those claimants include Scottish Widows, Scottish Widows Unit Funds, Pensions Management (SWF), Scottish Widows Unit Trust Managers, Clerical Medical Investment Group, St Andrews Life Assurance, Clerical Medical Managed Funds, Halifax Life and HBOS Investment Fund Managers.
A spokesperson from the RBS Shareholders Action group said: ‘It’s always been a surprise that Lloyds, a part state-owned bank, should wish to be involved in an action group against another majority state owned bank, and so their wish now to go their own way and to terminate their contract with the action group is not entirely unexpected.
‘This changes nothing in relation to this group’s determination to obtain justice for our members, and we are delighted with the progress we are making following the appointment of Signature Litigation.’
In November last year Bird & Bird lost its high-profile advisory role on the dispute following a disagreement over fees, a significant instruction that was given to Fladgate.
By early August this year funding for the case had run out, according to a lawyer close to the dispute. As such, disputes boutique Signature had won the instruction from the shareholders and had helped secure third-party funding for the case, led by founding partner Graham Huntley.
It is a long-running and complex dispute: with a hearing on liability scheduled for December 2016, there have been eight case management conferences as of this month before Mr Justice Hildyard QC.
The RBS Shareholder Action group is the largest of three currently in dispute with RBS, with the others represented by Quinn Emanuel Urquhart & Sullivan and Stewarts Law.
Herbert Smith Freehills continues to defend RBS in both cases, with a team lead by partners Adam Johnson, Simon Clarke, Kirsten Massey and James Norris-Jones.