FOUR major institutions, including Standard Life, are considering suing Royal Bank of Scotland over its £12 billion cash call in 2008, it was confirmed at a court hearing yesterday.
The Scotsman revealed earlier this month that international corporate litigation firm Quinn Emanuel had been privately hired by Standard Life Investments and Legal & General Investments Management as they weigh up whether to launch legal action against RBS for allegedly misleading investors in the bumper rights issue.
At a preliminary hearing at London’s High Court, Richard Snowden QC, acting for Quinn Emanuel, told Mr Justice Hildyard that he was also representing Prudential and the University Superannuation Fund.
Snowden said the four institutions combined had acquired “well over 10 per cent of the [RBS] rights issue”, and “have responsibility to many thousands of stakeholders”.
He said those institutions had not yet decided whether to commence proceedings but that the move was “under active consideration”.
The hearing was also attended by lawyers representing the two legal claims already launched.
They are a £4bn lawsuit by the RBoS Shareholders Action Group, backed by nearly 100 past and present institutional shareholders in RBS, and more than 12,000 small shareholders; and a claim said to run to possibly hundreds of millions of pounds made by a group of about 20 claimants, including international investors and pension funds from Britain, Canada and the US.
Also present was legal counsel for the RBS Rights Issue Action Group, representing about 8,200 RBS shareholders, which is also considering launching proceedings against the bank for allegedly misleading investors about its financial strength at the time of the controversial cash call.
The judge said he was still “minded” that all actions would be heard under a Group Litigation Order (GLO), suggesting any new and prospective claims would be heard at the same time.
Legal sources said this was a standard template in such cases of possible multiple actions against the same alleged wrongdoing in order to assist efficient adjudication of disputes.
Mr Justice Hildyard laid down a timetable for the court action, including a hearing to discuss how costs will be allocated among the various parties around 12 November, and RBS to have its defence lodged by 29 November.
Former directors, including ex-chief executive Fred Goodwin, are expected to be called to give evidence about the bank’s collapse.
The judge said there would be a third case management hearing held in January 2014 to mop up any issues, and confirmed his earlier guidance that the cut-off date for more people to join in the legal actions would be 15 April.
Michael Lazarus, legal counsel for the RBS Rights Issue Action Group, pressed the court for as early a meeting on costs as possible because many small shareholders needed to know whether they could afford to take up the legal action.
The judge said in setting the cut-off date for people to join actions he did not want to exclude people prematurely “but I must not put a brake on the existing claimants”.
David Blaney QC, of Herbert Smith Freehills, representing RBS, said the bank was “content” at any cases being heard under the GLO umbrella.