The Rock's hard place

14 January, 11:19

Once the wigs and suits had rooted themselves in court 76 of the Royal Courts of Justice there was barely room for the busload of Geordies to squeeze themselves in. Yet squeeze they did, for the judicial review into the Government’s nationalisation of Newcastle bank Northern Rock had been a long time coming for its former shareholders.

Aside from the fact that the former shareholders - many of whom had either been handed their shares when the Rock de-mutualised or had earned them as employees of the bank - have a vested interest in the outcome of the trial, the spectacle of 12 barristers slugging it out in front of Lord Justice Burnton and Mr Justice Silber had been a clear draw.

Yet on the first day of proceedings the trial was distinctly lacking in theatricals, with the morning taken up by Lord David Pannick QC’s take on why the shareholders are likely to get nothing by way of compensation from the Government. Even Silber J found it difficult to stifle his yawns, and in the end gave up trying.

For a moment it looked like Lord Anthony Grabiner QC, instructed by Slaughter and May to represent the Government, might cause a bit of a stir when his mumblings prompted a break in Pannick’s flow. Though Pannick tried his best to spice things up by turning 90 degrees and making a show of announcing “Lord Grabiner… Lord Grabiner is asking me a question,” it turned out that his Lordship had merely misheard his other Lordship and wanted him to repeat what he’d said.

It’s hardly surprising, then, that the busload of Geordies, seeking sanctuary in the protest occurring on the front steps of the RCJ, started trickling out, one passenger at a time, as midday loomed.

The millionaire shareholders kept their seats in court, though, with Jon Wood, founder of hedge fund SRM Capital, and Philip Richards, CEO of fellow hedge fund RAB Capital, sticking by their lawyers at White & Case and Nabarro.

By the afternoon Michael Beloff QC, RAB’s counsel, had taken the floor to outline the legal reasons why the Government’s efforts at compensating shareholders were nothing short of a “charade”. It’s Grabiner’s turn tomorrow. Let’s see how he answers that.