Harbinger Capital v Independent Valuer of Northern Rock; HM Treasury

Harbinger Capital Partners v (1) Andrew Caldwell (as the Independent Valuer of Northern Rock plc); (2) HM Treasury

January, 4 days, CoA

For the appellant Harbinger:

South Square’s Mark Phillips QC and Blackstone Chambers’ Monica Carss-Frisk QC, instructed by Brown Rudnick partners Louise Verrill and Neill Shrimpton

For the respondent Independent Valuer:

Brick Court Chambers’ Mark Howard QC, Martin Chamberlain and Jonathan Dawid, instructed by Mayer Brown partner Stuart Pickford

Northern Rock shareholders lost a significant sum when the bank was nationalised in February 2008, at the height of the sub-prime mortgages crisis in the US.

Hedge fund Harbinger Capital Partners is set to challenge a decision by Andrew Caldwell, the Independent Valuer of the bank, not to award compensation to those shareholders in the Court of Appeal (CoA).

This high-profile piece of litigation will be closely followed by around 16,000 shareholders who lost out as a result of the bank being nationalised. They were denied compensation at the first instance hearing last October.

Caldwell was appointed as the Independent Valuer to the Northern Rock Compensation Scheme Order in 2008. He was tasked with deciding how much compensation – if any – should be paid to shareholders. He concluded there should be none.

Some 440 shareholders appealed to the Upper Tribunal, but those appeals were dismissed and the valuation was upheld.

Harbinger is taking its case against the ruling to the CoA. It will challenge Caldwell’s interpretation of the valuation assumptions.

If successful, it could pave the way for compensation claims worth billions.