Rathbones sets aside £15m to settle court case
WEALTH and investment manager Rathbone Brothers has committed £15m to settle a court case in Jersey and associated legal proceedings against its insurers.
The case is linked to a claim that was filed against a former director of Rathbone Trust Company Jersey (RTCJ), which Rathbones owned between March 2000 and October 2008.
In July 2012 Rathbones issued proceedings to confirm that insurance cover on the excess layer of its civil liability, or professional indemnity policy, was in place to protect the company’s interests in the event of the claim being upheld.
In a judgement handed down in November following a trial, Justice Burton ruled in favour of Rathbones and the employee. However, he also ruled that the insurers should have a right of subrogation. This means the insurer could try to reclaim any insurance losses.
Chief executive Philip Howell said: “We are pleased to have closed off this long-running matter and to have removed this uncertainty from our business. Whilst we believe that the underlying Jersey claim would eventually prove unsuccessful and that effective insurance cover would be confirmed following the recent Appeal Court hearing, we have been mindful that litigation is never without risk and that we could face several more years of very substantial legal expense, having already incurred legal costs of approximately £5m. We have therefore concluded that joining a settlement would be in the best commercial interests of the company, allowing our senior management team to apply its full focus to executing our strategic plans.”
The group, which was founded in Liverpool – where it still retains a sizeable presence with 380 staff at the Port of Liverpool Building – has also issued interim figures which show total funds under management grew by 8% to £23.9bn in the six months to June 30. Pre-tax profit jumped by 33.2% to £30.9m. The board is recommending an interim dividend of 19p, up 5.6%.
