Vince Cable wrote an interesting article in City Am last week about the imminent appearance (on polling day, of all days) of Fred Goodwin, the former head of RBS in a court case brought by 9000 retail investors.

Goodwin, alongside RBS itself and several other former executives at the bank, are defendants in a case brought against them by 9,000 retail investors, including many current RBS employees. The trial starts in less than two weeks (22 May) and Goodwin will be called to the stand after the opening remarks. The claimants allege they were wilfully misled over the true financial woes of RBS during the £12bn rights issue of 2008, which was supposed to stabilise the bank. Within months, RBS had to be rescued by the government, which spent £45.5bn of taxpayer money to stop it from collapsing.

Vince notes that Goodwin’s defence is being publicly funded and he still enjoys a lucrative RBS pension:

Goodwin has spent the past seven years hiding from a public still furious that his dreadful calls – notably the 2007 purchase of Dutch bank ABN Amro – helped bring Britain’s economy to its knees. He left RBS in 2009 and was later stripped of his knighthood. But he has never been properly taken to task for his failures.

This is ironic given he would surely never have been so lenient on his own enemies, reportedly keeping “Fred’s black book” filled with names of executives who had angered him. He couldn’t tolerate alleged failures by his own staff, berating them for using Sellotape or offering him the wrong type of biscuit.

In exile, he has had a £342,500 RBS pension to keep him company. The bank is still 72 per cent-owned by the government, so the taxpayer is funding his lifestyle.

What’s more, we’re funding most of Goodwin’s defence. The legal bill for Goodwin and his fellow accused executives was estimated at £6.5m last year, with RBS picking up the tab. The bank will have spent more than £125m on this case when the trial ends later this year – one of the biggest fees in British legal history.

He argues that the Treasury should have settled this case before it came to court to avoid both unnecessary expenditure and the potential further damage to RBS that could result:

Whatever the merits of the case, we should be grateful to the claimants – thousands of ordinary men and women – who have finally forced Goodwin out of hiding. But for RBS’s own sake, this trial could and should have been avoided.

You can read the whole article here.

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