Page last updated at 17:03 GMT, Wednesday, 18 February 2009

Former QC takes on RBS in court

ian Hamilton
Ian Hamilton claimed that RBS hid the true state of its finances

A retired QC will have to wait another week before he knows if he can pursue Royal Bank of Scotland for negligence over shares he bought last year.

Ian Hamilton, 83, argued in court in Oban he should be permitted to sue the bank through the small claims court.

He said the bank should have known about the state of its finances when it offered the shares for sale in a rights issue in April last year.

RBS argued the case should be heard in a higher court due to its "complexity".

Sheriff Simon Pender will rule on the issue next week.

Mr Hamilton, one of a group which took the Stone of Destiny from Westminster Abbey in 1950, believes the action should remain in the small claims court and has said he will abandon the case if it is moved to the higher court, such as the sheriff court.

The pensioner said he was "sheltering under the rule" that in the small claims court expenses were limited to 150.

Mr Hamilton, from North Connel, Argyll and Bute, bought 640 shares at 2 per share in April's rights issue. The shares are now valued at less than 20p.

Bank's downfall

The bank recently came close to collapse and is now 68% owned by the taxpayer after being given 20bn of state support.

In addition, RBS has said it will post a loss of about 28bn when it publishes its full-year results later this month.

Mr Hamilton alleges that the bank was "negligent in representing themselves as solvent at all material times when in fact they were insolvent".

At the beginning of the case Mr Hamilton withdrew an allegation of fraud against the bank which had previously been contained in the writ.

He added: "I have come to the conclusion, with some reluctance, that what appears to have happened here was the officers of the bank dug a very big hole for themselves."

He added: "The chairman of the company has now admitted that the acquisition of ABN Amro was an error, leading to the defenders acquiring huge debts."

The court heard from Mr Hamilton that people were said to live in a democracy.

"If this is so, there must exist a court in which the members of that democracy can defend their little pieces of property against the big beasts which prowl about in our society," he added.

Solicitor advocate Joyce Cullen, representing RBS, said the action would include "detailed pleadings" and there was no provision for this in the small claims court.

Ms Cullen said the bank was denying all the claims made by Mr Hamilton.

She added that expert analysis of accounts would be relied upon and expert evidence would be required by the defender.

The court heard Mr Hamilton was opposing the motion to move the case because of his "age and frailty" and the fact it was likely to take some time to be heard.

But Ms Cullen said the RBS was happy for the case to remain in Oban and even if it did go to the Sheriff Court, it would be dealt with relatively swiftly.

Mr Hamilton is well-known for his exploits while he was a law student at Glasgow University.

He and three friends broke into Westminster Abbey on Christmas Day 1950 and took the iconic stone on which Scottish kings were crowned.

It was believed to have been plundered from Scone Abbey in 1299 by Edward I of England.

The students held on to it for a year before leaving it in Arbroath Abbey.

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