Five questions answered on the RBS investor compensation claim

There is a £3.5bn compensation claim against the Royal Bank of Scotland.

Thousands of investors have launched a £3.5bn compensation claim against the 82 per cent state owned Royal Bank of Scotland. We answer five questions on the claims.

What are this group of investors seeking compensation for?

The group are raising the claim against the bank as they believe the bank deliberately misled them into believing it was in good financial shape just before it collapsed in 2008.

After collapsing the bank was then bailed out by the government.

How many investors are involved in the suit against the bank?

12,000 private shareholders and 100 institutional investors.

These include 20 charities, churches, pension funds, hedge funds, fund managers and private client brokers, who collectively manage £200bn.

Are any individual bank members also being sued?

Yes, former chairman Sir Tom McKillop is also being sued, as well as Johnny Cameron and Guy Whittaker, who were also senior members of the bank at the time.

Former Chief Executive Fred Goodwin is also being sued by the group.

What have the investors said?

In a statement the group said:

"The action group maintains that the bank's directors sought to mislead shareholders by misrepresenting the underlying strength of the bank and omitting critical information from the 2008 rights issue prospectus.

"This means that RBS will be liable for the losses incurred on shares..."

A spokesman for the investors told the BBC: "Today represents a giant step forward for the many thousands of ordinary people who lost money as the result of inexcusable actions taken by banks and their directors in the financial crisis.

"Now, for the first time, some of these directors will have to answer for their actions in a British court."

What happens next?

The Royal Bank of Scotland has 30 days to respond to the class action which has been raised with the High Court of Justice's Chancery Division in London.

The group have estimated they could receive as much as £4bn from the claim.

Photograph: Getty Images

Heidi Vella is a features writer for

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Jeremy Corbyn challenged by Labour MPs to sack Ken Livingstone from defence review

Former mayor of London criticised at PLP meeting over comments on 7 July bombings. 

After Jeremy Corbyn's decision to give Labour MPs a free vote over air strikes in Syria, tonight's Parliamentary Labour Party (PLP) meeting was less fractious than it could have been. But one grandee was still moved to declare that the "ferocity" of the attacks on the leader made it the most "uplifting" he had attended.

Margaret Beckett, the former foreign secretary, told the meeting: "We cannot unite the party if the leader's office is determined to divide us." Several MPs said afterwards that many of those who shared Corbyn's opposition to air strikes believed he had mishandled the process by appealing to MPs over the heads of the shadow cabinet and then to members. David Winnick declared that those who favoured military action faced a "shakedown" and deselection by Momentum activists. "It is completely unacceptable. They are a party within a party," he said of the Corbyn-aligned group. The "huge applause" for Hilary Benn, who favours intervention, far outweighed that for the leader, I'm told. 

There was also loud agreement when Jack Dromey condemned Ken Livingstone for blaming Tony Blair's invasion of Iraq for the 7 July 2005 bombings. Along with Angela Smith MP, Dromey demanded that Livingstone be sacked as the co-chair of Labour's defence review. Significantly, Benn said aftewards that he agreed with every word Dromey had said. Corbyn's office has previously said that it is up to the NEC, not the leader, whether the former London mayor holds the position. In reference to 7 July, an aide repeated Corbyn's statement that he preferred to "remember the brilliant words Ken used after 7/7". 

As on previous occasions, MPs complained that the leader failed to answer the questions that were put to him. A shadow minister told me that he "dodged" one on whether he believed the UK should end air strikes against Isis in Iraq. In reference to Syria, a Corbyn aide said afterwards that "There was significant support for the leader. There was a wide debate, with people speaking on both sides of the arguments." After David Cameron's decision to call a vote on air strikes for Wednesday, leaving only a day for debate, the number of Labour MPs backing intervention is likely to fall. One shadow minister told me that as few as 40-50 may back the government, though most expect the total to be closer to the original figure of 99. 

At the end of another remarkable day in Labour's history, a Corbyn aide concluded: "It was always going to be a bumpy ride when you have a leader who was elected by a large number outside parliament but whose support in the PLP is quite limited. There are a small number who find it hard to come to terms with that result."

George Eaton is political editor of the New Statesman.