Judge to hear investors’ case against Lloyds Bank

A MAJOR lawsuit against Lloyds Bank and former directors over the disastrous rescue of HBOS in the financial crash is likely to be heard in late 2016.

Ex-Lloyds chief Eric Daniels. Picture: Getty

Sources at Lloyds Action Group (LAG), representing 9,000 private and 300 institutional investors, say the first case management conference before a High Court judge in the £400 million action is set for this March or April.

Such conferences hammer out the details of how the eventual trial will proceed, the timing and duration, and the exchange by claimants and defendants of relevant documents.

One LAG source said: “We believe the legal action is likely to be heard in the autumn or winter of 2016. It should take about six weeks as it is so straightforward. It is pleasing to get things moving with this case conference. However, it might not be until a second case conference later this year for a firm date to be confirmed.”

A separate multi-party lawsuit against Royal Bank of Scotland over its controversial £12 billion rights issue in 2008 will start in December 2016 – raising the possibility of two major bank lawsuits in rapid succession.

A source said: “LAG believes its action is tidier and easier than the RBS one, partly because it does not involve multiple parties and legal teams.”

LAG alleges that then Lloyds directors, including chief executive Eric Daniels, did not reveal in the shareholders’ circular before a vote to approve the HBOS acquisition the substantial financial lifeline HBOS was receiving from both Lloyds itself and the Bank of England to continue trading.

The group is being represented by solicitors Harcus Sinclair.

SUBSCRIBE TO THE SCOTSMAN’S BUSINESS BRIEFING

• Get the latest business headlines from a variety of news sources emailed to your inbox each morning