Angry RBS shareholders say they have secured after-the-event legal insurance to enable them to take their £4bn legal claim against the bank to trial.
The RBS Shareholders Action Group alleges that its members are victims of misrepresentation over the bank’s controversial £12bn rights issue in April 2008, a matter of months before the bank was forced to go cap-in-hand to the Government for the first of its bailouts.
The £23.5m package of insurance is designed to protect members of the group against a huge bill for costs in the event of an adverse ruling.
RBS has a battery of top lawyers working on its defence, so securing the legal cover is a key step for the shareholders, ranging from individuals to City institutions.
They say key facts about the bank’s financial state were withheld from them, leading to them facing huge losses as a result of investing in the cash call.
The Government holds 81 per cent of shares in RBS, which lost £8bn last year. An RBS spokesman said: “We believe that we have strong defences to these claims.”