The case began in 2013 when a complaint was filed against Rathbone Trust Company Jersey Limited, now known as Hawksford Trust Company after a sale in 2008, and one of its former directors.
Following the compliant, Rathbones sought to make a claim on its professional indemnity insurance, but was told by its insurers that it and the employee were not covered.
Rathbones and the director subsequently brought a case against the insurers, which it won in November 2013, with the judge noting “the employee was covered by the policy in respect of liability for the wrongful acts alleged in the Jersey proceedings”.
However, the case was left open for appeal and was recently heard in the English Court of Appeal.
Despite judgement not yet being handed down in the latest case and Rathbones’ chief executive Philip Howell noting “[Rathbones] believe that the underlying Jersey claim would eventually prove unsuccessful”, the company decided to settle the original claim with the complainant.
In a statement Howell said: "We are pleased to have closed off this long-running matter and to have removed this uncertainty from our business.
“While 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."
