Judge throws out case against Royal Bank of Scotland's restructuring unit after "serious doubts" over witness statements

Oliver Gill
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Today's case was closely watched by other parties lining up similar claims against RBS' restructuring division (Source: Getty)

A High Court judge has branded a case brought against Royal Bank of Scotland (RBS) by a customer of its restructuring division a "confusing mish mash" of evidence and thrown it out before it even went to trial.

Neil Mitchell was hoping to bring legal action against the bank, as well as KPMG and Cerberus, over the way his company, Torex Retail, was treated by RBS' Global Restructuring Group (GRG).

Mitchell, the former chief executive of Torex, claimed the three defendants conspired to push the firm into an insolvency process and flog the assets for less than they were worth.

Read more: Treasury watchdog MPs put RBS under pressure over £125m legal defence costs

The court started considering the evidence in March and today made its ruling on whether there was a case to be heard.

Today's ruling by Judge Malcolm Davis-White QC said he was "extremely concerned" about Mitchell's representations to the court, adding "I have serious doubts as to truth of the witness statement".

He also said the alleged conspiracy "makes little sense" and called some of the details presented to him a "confusing mish mash".

The case has been closely followed by other parties lining up their own claims against RBS' GRG division.

The bank has already set up a £400m compensation pot for small businesses treated unfairly by the firm's restructuring team.

Read more: RBS offers to sweeten the deal for shareholder action group

The Financial Conduct Authority (FCA) revealed last November its long-running investigation into the allegations against GRG had unearthed no widespread evidence of misconduct, although it did identify some failings, such as substandard communication with the customers placed in the turnaround division.

Reflecting on today's court ruling, a spokesperson for RBS said: “We have consistently maintained, over a number of years, that Mr Mitchell’s claims are without merit. We are pleased that the court has reached that same view and has rejected the claims in their entirety.”

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