Rathbones Brothers has completed its £15m payment to settle an ongoing legal dispute involving an employee of a former subsidiary.
On 24 July Rathbones Brothers announced it was to make the settlement to end any “uncertainty” that would come about from continued legal proceedings.
The settlement was conditional upon various matters which needed to be met. One of these was a receipt of approval from the court in Jersey.
As a result the £15m settlement will be reported as an ‘exceptional cost’ in Rathbones Brothers full year results for the year ending 31 December.
The dispute originated at the start of 2012, when claims were filed against three trustees because the assets owned by Rathbone Trust Company Jersey did not perform as well as expected.
Although Rathbones did not chose or manage any of the investments itself, one of the claims was against the former director of Rathbone Trust Company Jersey Limited, which the firm owned between March 2000 and October 2008.
In November 2013, a judge ruled in favour of Rathbones and its former director, saying the employee was covered by professional indemnity insurance “in respect of liability for the wrongful acts alleged” to have occurred at RTCJ.
But it was also ruled that the insurers could take over any rights of action the employee might have against Rathbones after paying their claim, under a “right to subrogation”.