Northern Rock shareholders dismissed by appeal court

Jul 29 2009 by Adrian Pearson, The Journal

ROCK shareholders are warning that they are prepared to take their compensation fight to the highest European court.

The former shareholders’ vow was made after the Court of Appeal dismissed their latest attempt to overturn the Government’s “zero return” compensation scheme.

They had argued the Government’s efforts so far were “unlawful, unfair and manifestly disproportionate”, adding that the compensation scheme was deliberately based on false criteria which would lead to shares being valued at zero so the Government would inevitably make a profit when the bank was eventually sold.

But the Court of Appeal has agreed with Government barristers who said that without the £54bn of taxpayers’ money poured into Northern Rock, the bank would have collapsed and shares been worthless.

Yesterday Lord Justice Laws, sitting with Master of the Rolls Lord Clarke and Lord Justice Waller, rejected any suggestion that the scheme was “in truth only a charade, the product of a settled intention by government to set a formula which would yield a zero figure for compensation”.