Bailed-out bank boss is spared his day in court

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

Mr Goodwin, who was stripped of his knighthood after the government was forced into a £45.5 billion bailout of RBS in 2008, had been in line for a public grilling as part of a £700m lawsuit brought by 9,000 retail investors and 18 institutions in the RBS Shareholder Action Group.

But yesterday, a judge heard that 87 per cent “by value” of the claimants had agreed a settlement deal, with the remainder expected to follow suit.

Mr Justice Hildyard agreed to “vacate” the planned three-month trial in the light of the latest development, but left the door open if negotiations failed.

He also called for an investigation into the rules governing expensive group litigation cases.

The bank, which is still 73 per cent owned by the government, supported the move.

The legal action centred on a rights issue overseen by Mr 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 the Dutch lender, ABN Amro.

Shareholders claimed they were left nursing huge losses following the cash call after the deal turned toxic, RBS shares fell by 90 per cent and the government was forced to step in.

The shareholders’ action group said it was “vindicated” by yesterday’s deal, which, it said, had come “after many years of campaigning for compensation on behalf of those who lost out in 2008”.

It added in a statement: “In that time, we have been forced to endure many struggles, including having to fund and run an entire case when the other claimants settled early.”

The group said the new settlement was twice that accepted by others “who had much greater resources than us”.

RBS said that payments were being made without any admission of liability.

The bank added: “87 per cent of the remaining claimants by value have accepted the settlement offer and the trial has now been vacated.

“This includes the Action Group, which represents the individual retail claimants. The offer remains open for acceptance for a short period to the further 13 per cent.”

Jonathan Nash QC, for the investors, said there was no information that the undecided claimants wanted to go to trial “at this time” or that they had the funding available.