05:05, July 25 111 0

2017-07-25 05:05:08
King & Spalding and One Essex Court join “arms race” against RBS

Lawyers from King & Spalding and One Essex Court have joined the lineup in the £700m trial between Royal Bank of Scotland (RBS) and property magnate Stuart Wall.

A source close to the case told The Lawyer the news of the additional counsel for Wall means the two sides are engaging in an “arms race” as the October trial date fast approaches. This addition comes after the third-party funder that is backing Wall strongly rebuked RBS for employing “two football teams” worth of lawyers, adding to the overall costs of the case.

Rachel Oakeshott at One Essex Court will join Guildhall Chambers’ Stephen Davies QC, Neil Levy and John Virgo, while Stuart Isaacs QC at King & Spalding will instruct them alongside Anthony Maton and John McElroy at Hausfeld.

Hausfeld replaced Withers’ litigator Andrew Wass as Wall’s representatives in March last year, with the tycoon citing a strategic change as the reason behind the reshuffle.

In one of The Lawyer’s Top 20 cases for 2017, RBS is being defended by Dentons partners Thomas Leyland and Felicity Ewing, who are instructing Fountain Court Chambers’ Andrew Mitchell QC, Tamara Oppenheimer, James Cutress and Adam Sher, as well as South Square’s Jeremy Goldring QC and Maitland Chambers’ Laurie Brock.

In pre-trial skeleton arguments, Litfun argued that the “spiralling costs” accrued in the case – which has taken the value of the claim from £400m to £700m – were due to RBS employing costly barristers, the most expensive of which commanded £1.2m in fees.

On that basis, it asked the judge not to grant RBS the £18m it was seeking in security for costs.

Indeed, RBS has spent nearly £5m on its six-strong counsel in the case against Wall.

After Andrew Mitchell QC, the most expensive barrister was Jeremy Goldring QC at South Square, who billed £1m, while the other barristers at Fountain Court – Tamara Oppenheimer, James Cutress, Adam Sher – accrued fees of £760,000, £775,000 and £645,000 respectively. Maitland Chambers’ Laurie Brock claimed £330,000 in fees.

The size of the counsel climbed from one leader and two juniors to two leaders and four juniors, while the solicitors employed at Dentons rocketed from one partner and two solicitors to a total of 22 fee-earners by April of this year.

“For RBS now to have two entire football teams of lawyers at Dentons working on this case, in addition to the six counsel, goes a long way to explain why RBS’ costs have swollen from an estimated £4m to trial in late 2015 to the £17.69m now sought,” Litfun representatives said.

However, Litfun has faced criticism that while RBS’ costs have been publicised, its costs have not been disclosed.

The bank denied that its costs were disproportionate, telling The Lawyer that it had a “very real and legitimate concern” that it would not be able to recover costs in the event its defence was successful.

RBS has been successful in settling a number of claims brought against it by disgruntled shareholders, the most notable of which was the £12bn rights issue. The bank settled with 9,000 investors with a last-minute offer of 82p per every £2 invested.

In that case, Mr Justice Hildyard also rebuked the bank and its lawyers Herbert Smith Freehills (HSF) for its “unsettling” and “unfocused” approach to litigation which raked up costs of £100m, with the value of the claim standing at about £800m.  Hildyard J said accumulating costs had “prejudiced” the claimants “in the very fact of further delay, including that costs rise inexorably with every day that passes before trial”.

The case continues.