The long running saga that is the £4bn shareholder group action against the Royal Bank of Scotland (RBS) has reached a decisive stage, as claimants represented by Quinn Emanuel Urquhart & Sullivan, Stewarts Law and Mishcon de Reya have settled their case while thousands of claimants represented by Signature Litigation will press ahead for trial next spring.
The RBS 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 alleged that the prospectus on which the rights issue was based was ‘defective’ and contained material misstatements and omissions.
Quinn, Stewarts, and Mishcon, which were instructed by a host of investors, are set to attend a private court hearing this Wednesday (7 December) to manage the logistics of the settlement with the case’s presiding judge, Justice Robert Hildyard.
Stewarts’ disputes partner Clive Zietman wrote a letter to the judge in relation to the hearing, where attached was a court order signed by the trio of settling parties.
Over 30,000 individual investors represented by Signature and Leon Kaye, have decided against settlement and are set for trial on 6 March 2017.
RBS chief executive Ross McEwan said in a statement: ‘We have been very clear that we wanted to deal with as many of our legacy litigation issues as possible during 2015 and 2016.’
‘We are pleased to have reached this agreement and hope that it will be accepted by the remaining claimant groups so that this long course of complex and costly litigation can now be concluded.’
The case has been dogged in controversy since its inception in 2014. In June Legal Business revealed Quinn, Stewarts and Signature were seeking millions worth of costs incurred from the claimants of Mishcon. Mishcon partner Richard Leedham, who took the instruction to lead the institutional clients from Signature last year, filed a costs estimate totalling £700,000 for legal work on the case up until that point. Mishcon settled the issue with the other firms weeks after.
Herbert Smith Freehills continues to represent RBS, with a team lead by partners Adam Johnson, Simon Clarke, Kirsten Massey and James Norris-Jones. The firm itself came under scrutiny after it emerged in June it would likely exceed its previous cost estimate of £92m.