Ian Hamilton wanted to fight his case against RBS in the small claims court
A retired QC has abandoned his legal action against Royal Bank of Scotland over the purchase of its shares.
Ian Hamilton wanted his case to be heard in the small claims court in Oban to limit his expenses to £150.
But a sheriff ruled that the legal and factual complexity involved meant it should be heard in a higher court.
Mr Hamilton alleged RBS was negligent when it sold him shares last year - the value of which later collapsed, prompting a massive public bail-out.
Mr Hamilton, from North Connel, Argyll, bought 640 shares at £2 each in last April's rights issue. The shares are now valued at about 23p.
The bank recently came close to collapse and is now 70% owned by the taxpayer after being given £33bn of state support.
When he launched his action, the retired QC said he was "sheltering under the rule" that in the small claims court expenses were limited to £150.
RBS argued the case should be heard in a higher court due to its "complexity".
On Thursday, Sheriff Simon Pender agreed with the bank's position.
He said: "I have considered the matter of the small claims procedure generally and the procedure is clearly intended for claims of low level which do not require legal complexity.
"I'm quite satisfied that the small claims procedure was never intended to be used for matters such as this."
He said the higher court was more suitable because it gave the opportunity for full written pleadings, which allowed each party proper notice of the legal and factual basis of the other's case.
This meant Mr Hamilton could have been liable for significant costs if he had pursued the action further and lost.
He announced his decision to abandon the action after the judgement was delivered, saying outside court he was "disappointed" by the ruling.
He said: "It does disclose a great gap in our law because people should be able to protect their property in court and call people like the Royal Bank of Scotland to account for their actions.
"I'm not entirely surprised because the procedure which I was attempting to adapt to complicated legislation was going to be very difficult but not impossible."
He said that the outlook for small investors remained bad.
Stone of Destiny
"Scots law favours the rich against the poor," he said.
"If I had succeeded it could have lit a trail because I could not have pursued the action by myself."
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 Stone of Destiny, 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 onto it for a year before leaving it in Arbroath Abbey.