LONDON (Reuters) - A British government department has applied to join a class action suit to represent some shareholders who are among those state-owned Royal Bank of Scotland (RBS.L) is alleged to have misled in 2008, a document seen by Reuters shows.
The Ministry of Justice’s move ahead of next month’s trial, at which former RBS chief executive Fred Goodwin is due to testify, is the latest twist in one of the costliest cases in British legal history.
The civil lawsuit is being brought by RBS investors, including former and current employees and around 100 institutions, who bought shares during a 12 billion pound ($15.35 billion) rights issue. They allege RBS, which later had to be rescued in a 45 billion pound bailout, and four of its former directors, concealed the extent of its financial woes.
The Accountant General of the Senior Court has applied to join the RBoS Shareholder Action Group to represent those such as children and the estates of people who have died intestate and might not otherwise be able to pursue claims, sources familiar with the case told Reuters.
The Ministry of Justice declined to comment on the application, which follows a similar move in February by senior businessmen including former RBS vice-chairman Angus Grossart.
Goodwin could not be reached for comment. RBS said it believes the bank, Goodwin and three other former executives named as defendants, have a strong case.
Claimants in such cases are typically restricted by a time limit of six years from the date when they could reasonably have found out about the offense, lawyers said, raising the question of whether new joiners to the suit will be allowed.
“We consider all new claims issued to be time barred and we will vigorously defend the claims on that basis,” an RBS spokeswoman told Reuters when asked about the application.
The case has already led to out-of-court settlements by RBS totaling hundreds of millions of pounds, with four of five groups originally suing the bank.
RBS has had to disclose more than 25 million pieces of information, including private emails and other messages sent by senior executives, to lawyers who allege RBS management at the time deliberately hid evidence of its deteriorating health before shareholders, who subsequently lost 80 percent of their investment, were tapped for cash.
RBS raised its settlement offer to the RBoS Shareholder Action Group, which includes institutions such as Bank of America Merrill Lynch, Axa and Aberdeen Asset Management, as well as businessman Trevor Hemmings, by 2 pence to 43.5 pence per share in March.
($1 = 0.7798 pounds)
Additional reporting by Kirstin Ridley and Andrew MacAskill; editing by Alexander Smith