Northern Rock shareholders fail in bid to secure improved compensation
The Northern Rock shareholders have lost their appeal to secure improved compensation following the nationalisation of the lender, with the claimants now prepared to take their case all the way to Europe. A judgment handed down yesterday (28 July) in the Court of Appeal supported a February decision, which scuppered the attempts of more than 150,000 private shareholders to increase their compensation level. The judgment followed a three-day hearing in June before the Master of the Rolls Sir Anthony Clarke, Lord Justice Laws and Lord Justice Waller.
July 29, 2009 at 10:53 AM
2 minute read
The Northern Rock shareholders have lost their appeal to secure improved compensation following the nationalisation of the lender, with the claimants now prepared to take their case all the way to Europe.
A judgment handed down yesterday (28 July) in the Court of Appeal supported a February decision, which scuppered the attempts of more than 150,000 private shareholders to increase their compensation level. The judgment followed a three-day hearing in June before the Master of the Rolls Sir Anthony Clarke, Lord Justice Laws and Lord Justice Waller.
The shareholders have confirmed that they will now attempt to take their case to the House of Lords but, if permission is refused, they will go to the European Court of Human Rights in Strasbourg.
The shareholders are not challenging the bank's nationalisation, but are claiming that the criteria established for the valuation process breached the European Convention on Human Rights.
They claim that the Government's compensation scheme in the wake of the nationalisation left the value of their shares at virtually zero, whereas Northern Rock's book value before the February 2008 rescue was at least £4 per share.
White & Case is representing activist hedge fund SRM Global Fund, which acquired an 11.5% stake in the bank and joined the UKSA in the judicial review. Litigation partner John Reynolds led the team, with Blackstone's David Pannick QC and Maitland Chambers' Matthew Collings QC instructed as counsel.
RAB Special Situations Fund was represented by Nabarro, with Blackstone Chambers' Michael Beloff QC and One Essex Court's David Wolfson instructed as counsel.
David Greene, head of litigation at UK group action specialist Edwin Coe, advised the largest group in the action, the UK Shareholders Association, which comprises 150,000 shareholders who held almost 25% of the bank's shares. Blackstone Chambers' Thomas de la Mare was instructed as counsel.
Slaughter and May is representing the Commissioner of HM Treasury with Brick Court Chambers heavyweight Jonathan Sumption QC instructed as counsel alongside Clive Lewis QC of 11 King's Bench Walk.
Commenting on yesterday's judgment, Reynolds said: "We embarked upon this legal challenge in the full expectation that it would be a lengthy process. We are determined to see it through to its conclusion."
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