RBS criticised by judge for ‘staggering’ HSF legal costs in rights issue case

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Royal Bank of Scotland (RBS) has been criticised for the costs racked up by its legal advisers at Herbert Smith Freehills (HSF), by the judge overseeing the court battle over its controversial £12bn rights issue in 2008.

In a case management hearing held on Wednesday (3 May), Justice Hildyard described RBS’s legal costs as “staggering”.

HSF is acting for the bank in the dispute over the rights issue, which was brought by a group of former RBS shareholders who claim they were misled into participating.

The HSF team is being led by partners Adam Johnson, Simon Clarke, Kirsten Massey and James Norris-Jones. It is understood the firm’s total fees for its work on the case will be around £100m.

The team is demanding the claimants contribute £11m into a trust account to fund RBS’s costs if it loses the case.

In the hearing this week, Justice Hildyard said: “I’m not saying for a moment that Rolls-Royces aren’t expensive to maintain. I’m saying that it would be an odd impetus for the court to give, that you can charge that to the other side.”

The shareholders, who are represented by Signature Litigation partner Graham Huntley, are the last remaining claimants after groups advised by by Quinn Emanuel Urquhart & Sullivan, Stewarts Law and Mishcon de Reya settled for £800m in December last year.