RBS blames own lawyers in bid to deny customer £200,000 damages

The Royal Bank of Scotland has gone to court to try to avoid paying a customer £200,000 in damages, blaming mistakes by its lawyers for the award.

Nigel Matheson, a restaurateur, sued the bank in a long-standing dispute about an overdraft extension. However, because of “oversights” by solicitors acting for RBS, the action was not defended and Mr Matheson was granted a decree.

Yesterday, Lord Glennie was asked by RBS in the Court of Session in Edinburgh to set aside the decree and deny Mr Matheson a “massive and wholly unjustified windfall”.

Mr Matheson argued he had met “mind-boggling inefficiency” in his litigation and should receive the award. The judge said he would give a ruling in a fortnight.

Mr Matheson, 63, runs The Conservatory restaurant at Ballachallan, Cambusmore, Perthshire. He claims that, in 2005, RBS granted a £5,000 extension to his company’s overdraft but then unilaterally withdrew it. As a result, he alleges, the business suffered and he was caused psychiatric hurt.

In 2008, Mr Matheson raised an action in Perth Sheriff Court, seeking £200,000 damages. The bank has lodged defences and the case is continuing.

Last year, he also served a Court of Session summons on RBS, again asking for £200,000 damages. At that stage, he had solicitors, but they later withdrew. As a party litigant, Mr Matheson lodged the summons for “calling” – a crucial procedural step in litigation which should trigger action by the other side – and it was published on the Court of Session’s calling list in February this year.

However, there was no response from RBS, and the following month Mr Matheson was granted a decree in absence, in light of lack of any indication the case was to be contested.

RBS later learned of the decree and immediately raised the current case to have it declared null and void. The bank said in its pleadings to Lord Glennie that it had always disputed Mr Matheson’s assertion that he had been given an overdraft extension.

Due to “oversight”, the solicitors for RBS, McGrigors, missed the case on the Court of Session calling list, the bank said. Mr Matheson had sent a fax to McGrigors about a week later in which he mentioned that the case had been called.

The bank told Lord Glennie: “His notification of the calling of the summons was overlooked by the agents who misread the letter. As a result of the mistake by the agents, neither (RBS) nor the agents were aware of the summons having been lodged for calling. If the agents had noted the summons had been lodged for calling, they would have taken immediate steps to seek to enter appearance and lodge defences.” The bank submitted: “On the true facts of the dispute… decree ought not to have been granted… the decree was not justified.”

Alistair Clark QC, for the bank, said that if the decree stood, Mr Matheson would enjoy “a massive and wholly unjustified windfall.”

Mr Matheson said he had tried “every which way” to find a solution to his complaint against the bank and had been forced into litigation. He said: “My action has been met with a collection of failures, errors and oversights…mind-boggling inefficiency. I took my decree absolutely correctly as per the rules of court. I do not think I could have put the bank and its agents on greater notice than I have.

“They only have themselves to blame for the situation that has been created. I am in no way at fault.”