Third-party funder backs RBS misrepresentation claims

Third-party funder Argentum has agreed to bankroll a multi-million pound claim against the Royal Bank of Scotland (RBS).

The case, which is expected to break new ground by testing section 90 of the Financial Services and Markets Act 2000, compensation for false or ‘misleading statements, is being run by Stewarts Law partner Clive Zietman for a group of 21 claimants.

Argentum is one of a number of funders to give financial support to the case, with the clients looking to share the risk of the litigation.

Argentum head of legal review Matthew Reach said the case was particularly attractive because of its merits.

The case was launched at the High Court last week (28 March 2013). The central claim is that the prospectus on which RBS’s April 2008 rights issue was launched was defective and contained “material misstatements and omissions”.

3 Verulam Buildings’ Andrew Onslow QC has been instructed to lead the case by Zietman.

Yesterday (3 April), in a separate move, the RBS Shareholders Action Group officially launched a claim based on the same principals against the bank. That action was first mooted in 2010 with Olswang’s then co-head of litigation Steven Baker leading the case, which is worth a potential £4bn (25 January 2010). Baker has since moved to Bird & Bird.

It is understood that one option would be for the action group to apply for a group litigation order to take the case forward.

Sources suggested that the two claims could be joined by the court to allow the legislation to be tested.

RBS has turned to Herbert Smith Freehills to defend the claims.