Judge to hear confirmation of RBS claim settlement

A High Court judge overseeing a multimillion-pound legal action brought by thousands of shareholders against Royal Bank of Scotland (RBS) is expected to be told formally today that a settlement has been reached.

The much-anticipated civil litigation has been the subject of a series of adjournments to allow talks between the bank and investors to continue.

On Tuesday it was reported that the shareholders had reached an out-of-court resolution of the dispute, and had informed Mr Justice Hildyard of the latest development.

A trial was due to begin in London on Monday May 22 and last for 14 weeks, but did not get off the ground because of the settlement negotiations.

The proceedings were last in court on May 25 when the judge granted a third adjournment until today.

At the last hearing the judge was told that progress ''continues to be made'' towards settlement.

The legal action centres on a rights issue overseen by former boss Fred Goodwin in April 2008 when RBS asked existing shareholders to pump £12 billion into the bank after leading a consortium that spent £49 billion on Dutch lender ABN Amro.

Shareholders claimed they were left nursing hefty losses following the cash call after RBS shares plunged 90% and the Government was forced to step in with a £45.5 billion bailout when the deal turned toxic.

A trial would have seen disgraced former chief executive Mr Goodwin, who was stripped of his knighthood following the bank's near collapse, face questioning in court.

Former executives were also expected to be called as part of a £700 million lawsuit brought against the lender by 9,000 retail investors and 18 institutions in the RBS Shareholder Action Group.

The bank has previously settled compensation claims brought against it by other shareholder groups in connection with the 2008 rights issue.

But the lender, which is still 73% owned by the Government, stressed payments were made without any admission of liability.