The pension funds of two Labour-run councils have decided that they have a case against Fred Goodwin and the other directors of RBS and the bank itself. No doubt wary of the denizens of the Inns of Court, they opted to take counsel from that well known legal eagle well versed in commercial matters, Ms Cherie Booth. It sounds like they will try to make this the trial in the court of public opinion that we have been hearing about.
Wary of the potential costs of litigation, the councils have opted for a class action suit in the United States. Whatever the merits, this does not seem so wise if they are trying to recover from Sir Fred or his fellow directors. While the dirctos' assets may be substantial by many measures, it is likely that if the lawsuit is successful, Sir Fred's assets would not go very far in satisfying the funds' claims, particularly if shared between many class action claimants.
On a more positive note we can look forward to Sir Fred's repudiation of any claims of his incompetence when he points out that Ms Booth's husband knighted him for his services to banking.
If the plaintiffs are successful, then the greater part of any substantial liability will likely fall to be paid by the defendant with the deepest pockets, RBS (who in any event are also indemnifiying the directors, the cost of which may be picked up by RBS' insurers). At the moment this means, albeit indirectly, the tax payer. The government has said it will stand behind RBS and is hoping to take a profit on his RBS shares at some point.
So the wife of the recently departed prime minister is suing a government-owned bank that entered into some very poor investments and made some poor lending decisions while it was supervised by her husband's government. If Ms. Booth's clients see fit to sue the directors of RBS, one might ask why she is not also advising them to sue the bank's regulators and relevant Treasury ministers?