AN ACTION group that had been attempting to bring a rights-issue related claim against Royal Bank of Scotland for time-barred investors has abandoned the bid after failing to engage lawyers.
The RBOS Shareholders Action Group was one of five claimant groups that launched a case against RBS on the grounds that the bank had allegedly misled investors about its financial health when making a £12 billion cash call in 2008. The bank received a £45bn bailout from the UK Government soon after receiving the rights-issue cash.
While the RBOS Shareholders Action Group settled that claim for £200 million last June, around 1,300 of its members were excluded from the settlement because they had signed up after the June 2014 cut-off date. Legislation states that claims have to be brought within six years of the event being complained about – in this instance the rights issue – taking place.
Read more: RBS faces fresh wave of claims in shares sale legal fight
Last September a spokesman for the group said that a breakaway group was being formed for the late claimants because “an eminent QC in the area of banking and securities law” had advised that it would still be possible for them to bring a claim.
He alleged that because the main group’s lawyers had uncovered “evidence of deliberate concealment” of the bank’s financial position that would have been presented had the original claim made it to court, the six-year limitation period would be “waived or vacated”.
The action group did not respond to requests for comment made through its solicitors, but in an email sent to one late claimant it confirmed that it had been unable to instruct solicitors to bring the claim.
“Unfortunately the talks with the lawyers were not successful, consequently we will be refunding your subscription fee,” the email said.
Another time-barred investor who had signed up to the original group said that it had “returned [my] subscription money and advised that they would not be pursuing a claim for late claimants”.
“In my opinion the action group have acted pretty poorly having initially taken subscriptions and taken on late claimants to their register and then post-settlement just dumped them all into the wasteland,” he said.
Read more: Legal spat hots up as RBS investors await share of £200m claim
It comes after the RBOS Shareholders Action Group - which no longer represents the shareholders who are due a share of the £200m settlement - this week faced questions in court about some of the expenses incurred in bringing the original claim.
This latest action was brought by Manx Capital Partners, a former action group member that helped fund the case against the bank and succeeded the group as manager of the claims last year.
In particular, Manx wants the group to hand over information relating to Evalusafety, an entity with an unknown link to the action group that is claiming a success fee of between £20m and £35m from the claimants’ £200m settlement.
Read more: Claimants face lengthy wait for RBS cash as legal cases pile up
Manx argued that without that and other information London law firm Signature Litigation, which is acting for the affected claimants, will not be able determine the full costs of the case and so will not be able to make a final payout to investors. So far just £25m of the settlement has been paid out.
The action group, meanwhile, is seeking a court-ordered review of Signature’s own fees, which will also be met out of the settlement.
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