Costs cap boosts support for action against RBS

ROYAL Bank of Scotland chief executive Ross McEwan looks certain to face at least three legal actions over RBS’s controversial 2008 rights issue as a leading shareholder group says it has had a huge response to a cap being set on costs.

A spokesman for the RBS Rights Issue Action Group, which represents more than 8,000 small shareholders, told Scotland on Sunday: “We are moving forward steadily. Since the case management conference ruling in December on costs we have had a huge response from our members wanting us to push ahead.

“They have contacted us steadily every day, by phone calls, e-mails, letters. Not a day goes by without further support coming through. The action is firm and we are intending to launch proceedings.”

A key factor was the judgment of Mr Justice Hildyard before Christmas that any costs awarded against the plaintiffs in any action would be based on how many shares institutional investors and private shareholders took up in the stock market cash call.

It was widely seen as limiting the potential downside for less well-off small shareholders in trying to press their claim that the RBS rights issue prospectus misled investors as to its financial strength. RBS vigorously contests this.

Two sets of legal proceedings have already been launched against RBS.

They are a £4 billion lawsuit by the RBoS Shareholders Action Group, backed by 100 institutional investors and more than 12,000 small shareholders; and a claim said to run to hundreds of millions of pounds made by a group of nearly 80 institutional investors, including international investors and pension funds.

Edinburgh-based Standard Life Investments and Legal & General Asset Management have retained separate lawyers, Quin Emanuel, to monitor the pre-trial proceedings before deciding whether to launch their own legal actions against the bank about the rights issue.