Bill Jamieson: Too late for a rush to judgment?

But has he overstepped the mark in his letter to fellow Liberal Democrat, Lord Wallace of Tankerness, Westminster’s top Scottish law officer? Does either Mr Cable or Lord Wallace have authority in this matter?

The Business Secretary is angry that those primarily responsible for the downfalls of RBS and HBOS have been able to walk away with huge sums of money and with very little by way of legal constraint, still less punishment for their colossal errors of judgment.

And five years on from the crash, he has cause to be angrier still. Little has resulted by way of discipline and sanction. In this, the vast majority of the public share his frustration.

That is the background to a letter Mr Cable has written to Lord Wallace urging a rapid decision on whether to prosecute former directors of RBS and seeking an update on progress. The issue had been referred to the Scottish Crown Office almost 18 months ago. Mr Cable said he wanted a decision to be reached quickly.

His letter insisted he was “not seeking to influence the outcome” of the legal process in any way. Well, most of us have had taps on the shoulder like this in our working lives. “Don’t want to influence your decision, of course” – but that is exactly the sub-text the recipient takes away. Influencing the outcome is precisely Vince Cable’s game.

But there are problems here. It is not just that Lord Wallace may have been the wrong shoulder to tap on. It is whether Mr Cable as a government minister should be tapping any legal shoulders at all in this manner. Lord Wallace is not the prosecutor in this case. It is the Crown Office and the Lord Advocate in Scotland who do the prosecuting.

Lord Advocate, Frank Mulholland, the head of Scotland’s public prosecution service, has now told Mr Cable to buzz off, questioning why he had written to Lord Wallace rather than the Crown Office. “It would be unfortunate”, he declared, “if this were to be construed as attempted interference with independent investigation and prosecutorial decision-making by the law officers.”

Mr Cable’s frustration is understandable. The wheels of resolution over this affair have certainly ground slow. Three years after the RBS debacle, in December 2011, a report by the Financial Services Authority said the bank was brought to its knees by “multiple poor decisions” and a £50 billion “gamble” on the ill-fated acquisition of Dutch bank ABN Amro. It also said chief executive Fred Goodwin’s “assertive and robust” management style had been flagged as a potential risk as early as 2003 – four years before he led the disastrous charge to buy ABN.

It was not until January 2012 – more than four years after the collapse – that Fred Goodwin was stripped of his knighthood. Months later, the Crown Office in Scotland confirmed an investigation had been under way for some time because of “the degree of public concern about recently reported issues in the banking sector”.

Mr Cable appears keen to ban individuals from being company directors – not only in senior financial jobs, but in any company. But he cannot take decisive action on this while the Crown Office investigation drags on.

What, then, explains the delay? The Crown Office’s work would seem easy enough. Did not Goodwin agree to take a cut in his RBS pension and Johnny Cameron, his corporate banking lieutenant, accept an FSA fine and a ban on appointments in the financial sector? As for the excoriating report from Westminster on the multiple failings at HBOS, is there not abundant evidence behind its recommendation that former chairman Lord Stevenson and ex-chief executives James Crosby and Andy Hornby be similarly banned?

However, there are reasons for caution. A key issue for the Crown Office is determining how far the net should be cast and how far down the RBS executive chain of responsibility its judgment should go. Picking on one or two names at the top does not just smack of scapegoating. It would also be to turn a blind eye to the collective responsibility that has long been a feature of major corporate organisations.

There were divisional directors, non-executive directors, auditors, compliance officers and internal risk assessors and accountants who all played a part. Where is the precise legal line of culpability and sanction to be drawn? And in seeking to draw it, does this not in equity entitle those potentially in the firing line to legal representation and an opportunity to put their case and be heard?

The drafting of new codes – civil or criminal – is on shaky ground when it comes to rest on hindsight. Hindsight arms the law not with a precision instrument, but a blunderbuss.

There would be concerns, too, over precedent setting. Is poor judgment a crime? The issues may appear cut and dried in this particular case. But once legal sanction is established, to what other areas of modern life could it not be applied?

Would it not also apply to instances of government and public sector failing? We might, for example, view the managers of the Edinburgh tram project as culpable of gross misjudgment and seek to have them permanently banned from further positions of authority. What of the cases of public sector waste and mismanagement, such as hospital failings or IT contracts that go appallingly wrong? Should not Cabinet ministers be disbarred from future public office when a policy turns out to have failed? Perhaps Mr Cable would be well advised not to be in such a hurry.

The Crown Office, in considering prosecution should also take care not to arrive at an outcome that discourages anyone from taking up a senior position in business or public life without a regime of precise legal definitions turning every employment contract into a Napoleonic Code.

Finally, there is a sensitive political dimension. St Andrew’s House may be watching this with some apprehension. Supporters of Scottish independence would not wish to see in the immediate approach to the referendum a running legal prosecution over the governance of two giant banks headquartered in Scotland, administered in Scotland and which formed a key part of the Scottish financial services sector. Now that the window of early resolution has passed, the administration may prefer to promote the example of Jarndyce v Jarndyce: spin this out until after the referendum date for fear of clouding perceptions of confidence in the regulation and governance of Scottish institutions.

This dimension should not, of course, concern the Crown Office. But it has sound reasons for not rushing to judgment despite continuing public anger. Mr Cable may be incorrect in tapping the shoulder for urgency. All the more reason, perhaps, for the Crown Office to mind where exactly this tap might lead.