Rathbone Brothers reach £15m settlement with former director

18th Aug 2014 11:14

Rathbone Brothers, the London-based investment management firm, has paid a £15m settlement over a legal dispute involving a former director and employee of a former subsidiary, the company announced on Monday.The settlement, which was initially announced on 24 July, was subject to "various matters", including court approval in Jersey. On Monday, however, the group announced the requirements had been met and that it had paid its share of the settlement.The legal proceedings involved Rathbone Trust Company, a Rathbone subsidiary between 2000 and 2008, and cost Rathbones £5m in legal fees plus the £15m settlement.The dispute started at the beginning of 2012, when claims were filed against three trustees because the assets owned by Rathbone Trust Company did not reach the level of performance it was expected of them.In November last year, 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 the trust firm.However, the judge also ruled the insurers could take over any rights of action the employee might have against Rathbones after paying their claim, under a "right to subrogation". The company has announced the payment will be treated as an exceptional pre-tax charge.Rathbones shares were down 0.29% to 2,097p at 11:28 on Monday.DC