Cherie Booth QC found herself back in the headlines this week, this time as the champion of two pension funds aiming to get the Royal Bank of Scotland (RBS) and Sir Fred Goodwin into a US courtroom.
Cherie Booth QC found herself back in the headlines this week, this time as the champion of two pension funds aiming to get the Royal Bank of Scotland (RBS) and Sir Fred Goodwin into a US courtroom.
She has been hired by Coughlin Stoia Geller Rudman & Robbins partner Patrick Daniels, who is determined to pursue the case to the bitter end and get some compensation for Merseyside and North Yorkshire councils.
The local authorities’ pension funds have a combined value of £4bn, but their deficits are believed to have grown significantly thanks to investments made in RBS.
Clearly the schemes have a good case, but why sue RBS in the US when it’s a UK company?
Daniels points out that RBS’s investment arm RBS Greenwich Capital (RBSGC), which raised the capital used to buy ABN Amro through making investments in sub prime mortgages, is based in the US. As the deal ultimately led to the near collapse of the former banking giant, it makes sense for the pensions schemes to seek justice in US courts.
RBS’s US arm is also where an executive who earns more than Sir Fred and – wait for it – will even receive a bigger pension than Sir Fred is based. Coughlin Stoia says RBSGC chief executive Jay Levine, who is the highest paid RBS employee in the world, will be named as a defendant in the case along with the entire RBS board.
As if that wasn’t reason enough, Daniels also says that it would also be cheaper to bring the action in the US, argues Daniels, adding that the US collective action system allows greater access to justice than the UK class action model.
But why Booth, who after all is known more as a champion of human rights than hard-nosed City QC?
“I’ve worked with her before,” says Daniels, adding that Booth is a leading expert on collective actions.
There’s also a sneaking suspicion that having Booth’s name attached to the case might help win it more publicity, but Daniels points out that the aim is not to get a plane-load of pension scheme members to travel to the US as part of the action.
“The court doesn’t want dozen of investors coming over to the US,” says Daniels, adding that this will instead be a representative action which, if successful, will allow other UK authorities with exposure to RBS losses to make a claim against the bank. Daniels reckons there are dozens of authorities out there with exposure.
While plenty of people will be waiting with baited breath to see Goodwin in a courtroom there’s sure to be outrage about the use of taxpayers money to both fight and defend this case – after all RBS is funded by the taxpayer and so are the councils launching the fight.
