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£12m ATE policy backs RBS share “mis-selling” action


RBS action: biggest ATE policy of last year

A £12m after-the-event insurance policy is sitting behind the RBS shareholders’ rights issue claim in addition to third-party funding, it has emerged.

A group of 21 claimants issued proceedings last week seeking compensation in a multi-million pound claim over the bank’s 2008 cash call.

The first to be filed in the UK over RBS’s record £12bn cash call just before the credit crisis in 2008, it alleges the bank published a defective prospectus littered with “mis-statements and omissions”.

The case is being run by Clive Zietman, head of commercial litigation at London law firm Stewarts Law and last week we reported [2] that Argentum is the majority third-party funder of the case, with others also involved.

Yesterday litigation funding broker TheJudge revealed that it successfully syndicated the capacity for the adverse costs cover to support the claim. The policy value, which exceeds £12m, was brokered via TheJudge with a host of insurance providers.

The indemnity is believed to be the largest issued for a single case in the UK during the past 12 months.

James Delaney, director at TheJudge, said: “We’ve seen a shift over the past 12 months for larger indemnity policies. It’s never easy syndicating capacity for large limits, as insurers often have their own views over pricing, reporting, policy wording terms and conditions etc.

“This policy and a wave of other large limit deals recently completed for commercial arbitrations and litigation demonstrates that, although litigation funding often grabs the limelight, the insurance market is often the foundation for many claims.”