Court orders ‘driving force’ behind RBS action group to hand over thousands of documents

An action group company that was set up to sue the Royal Bank of Scotland (RBS) over its 2008 rights issue has been ordered to hand over approximately 19,000 documents relating to the litigation, a London court ruled on Wednesday.

The RBoS Shareholders Action Group company (AGC) brought together RBS shareholders who successfully sued the bank for around £200m last year over accusations it misled them when they subscribed to its 2008 rights issue.

On Wednesday the court heard how the settlement process had been delayed owing to documents, including emails, being held back by the AGC and businessman Gerard Walsh, who was described as the “driving force” behind the group.

The new agent for the claimants, Manx Capital Partners, which is represented by Signature Litigation, won a court order on Wednesday that will force Walsh to hand over 19, 284 documents that its lawyers said were needed to determine how the settlement will be paid out, including information on “various claims by third parties in respect of settlement monies”.

The court heard how Walsh had refused to hand over more than 15,000 documents that Manx said were relevant to the action group. He will now have to submit them to Manx.

Manx had accused Walsh of not complying with the order to disclose the documents that was set by the High Court in April.

Walsh’s lawyer Barra McGrory QC told the court that the order had been "honoured" and that the disclosure process proposed by Signature, which has legally represented the RBS claimants throughout the proceedings, gave Walsh the right to use his own judgment as to whether the documents were relevant, irrelevant or legally privileged.

“But that appears not to be to the satisfaction of Manx or its representatives, which has made it very clear it does not trust Mr Walsh to make that decision unsupervised and entirely on this own,” he said.

He said there was a "very large category" of emails that Walsh considered to be private and not to do with the business of the AGC.

Ian Higgins, a lawyer for Manx, told the court that Walsh was reluctant to hand over the documents because of the “deteriorating” relationship with Signature, which he argued had “broken down long before” the April order.

He said the law firm had evidence that Walsh “masqueraded as people that don’t exist” to communicate with claimants.

The court heard how Signature had also uncovered 90m "phantom" RBS shares that “ended up on the claims register, and there is a dispute as to how that happened”.

“It can’t possibly have been thought by someone doing a good faith review that emails about exactly that topic were not agency documents,” he said.

Walsh will appear for cross examination in January.