RBS taken to small claims court

A former QC taking legal action against the Royal Bank of Scotland said today that he hoped the battle will answer questions about the financial giant’s downfall.

Ian Hamilton, 83, is taking RBS to court with a claim that the bank was insolvent when it sold him shares.

The former QC alleges that the bank concealed the “true state” of its finances when he bought stock worth £1,282 (€1,447).

He bought 640 shares at £2 (€2.25) a share in the bank’s rights issue last year. RBS shares are currently valued at just over 20p.

The bank recently nearly collapsed and is now 68% owned by the taxpayer after being given £20bn (€22.59bn) of state support.

RBS has said it will post a loss of about £28bn (€31.6bn) when it reveals its full-year results later this month.

Mr Hamilton, from Lochnabeithe, Argyll and Bute, launches his case against RBS in the small claims court in Oban Sheriff Court tomorrow.

And the pensioner, who took part in a famous Christmas Day raid to seize the Stone of Destiny almost 60 years ago, said he hoped the process can shed some light on the bank’s misfortunes.

“The Royal Bank of Scotland has literally collapsed and the Government has done nothing to find out why,” he told BBC Radio Scotland’s Good Morning Scotland.

“Of course I would like my £1,282 (€1,447) back but, like everyone else, I would like to know what has been going on.

“We’ve had a parliamentary committee inquiry, in which everyone has said they were terrible sorry but they didn’t tell us what they had actually done.”

Mr Hamilton also said the British government should be responsible for calling the bank to account.

“The government should be doing it. What sort of government is this? Sitting in London, twiddling its fingers, saying: ’Oh, oh, very, very sorry’.”

Ministers seemed “to be doing nothing but filling in the hole that the Royal Bank of Scotland has dug”, he added.

Mr Hamilton said the small claims court is the only place he can afford to take on RBS.

“In the small claims court everyone is equal before the law because the most that can get awarded in expenses against me should I fail is £200 (€226),” he said.

He added that the hearing tomorrow will see RBS try to shift the case to a higher court – and he said this may make it too expensive for him to continue.

Mr Hamilton said: “That is what the fight will be about on Wednesday – whether it stays where the citizen can afford to litigate or whether I abandon the case.”

The pensioner said the writ he has lodged in court states that the bank invited shareholders, including his wife, to invest in a rights issue and that he took up the offer on her behalf.

He alleges that RBS induced him to invest his money by “concealing the true state of their finances”.

And he alleges the bank was “negligent in representing themselves as solvent at all material times when in fact they were insolvent”.

An RBS spokesman said he was aware of the case but it would be inappropriate for him to comment further as the matter was subject to legal proceedings.