Mail Online By James Salmon, Banking Correspondent For The Daily Mail
- Ex-directors of state-backed Halifax Bank of Scotland are in legal battle
- Include former chief executive James Crosby and successor Andy Hornby
- Regulators are investigating the role of them and others in bank’s collapse
- RBS, 79 per cent taxpayer-owned, predicts £42million spend in its defence
Taxpayers have paid millions of pounds in legal fees to defend disgraced former bosses of HBOS and Royal Bank of Scotland.
Ex-directors of state-backed Halifax Bank of Scotland are battling with regulators investigating their role in the bank’s collapse.
They include former chief executive James Crosby, successor Andy Hornby and former chairman Lord Stevenson.
The legal bill has spiralled as a report into what went wrong and who was to blame has been delayed by their lawyers.
But it emerged the bankers have not paid to defend themselves against allegations their reckless pursuit of growth led to the bank’s implosion.
Their fees to City law firm Ashurst have been covered by Lloyds, which took over HBOS in 2008 before being rescued with a £20.5billion bailout. Taxpayers own 18 per cent of the lender.
RBS, which is 79 per cent owned by taxpayers, estimates it will have to spend £42million defending itself and former bosses against a £5billion lawsuit.
Investors claim the bank misled them into buying shares in 2008 by playing down the parlous state of its finances.
Jonathan Isaby, of the Taxpayers’ Alliance, said: ‘Taxpayers will be furious that years after the bank bailouts, the costs continue … These legal bills will only rub salt in the wound.’
Labour MP John Mann said: ‘These individuals have done extremely well out of a bank which they have driven to collapse. They should be picking up their own legal bills.’
The Financial Conduct Authority report was due to be published in 2013. Last week it emerged lawyers for former HBOS chiefs had made another bid to delay it, questioning its independence.
Maxwellisation, the term given to allowing those criticised the chance to respond, has dragged on for almost two years. But the bankers have not paid any legal fees, despite their huge rewards.
Mr Crosby has an annual taxpayer-backed pension worth more than £400,000 from HBOS. Andy Hornby is thought to enjoy a seven-figure pay package as chief of bookmaker Gala Coral.
Paul Moore, a former HBOS executive sacked in 2004 after warning about the bank’s reckless lending, said it was an ‘insult to taxpayers’.
He added: ‘These former directors were accountable for catastrophic failures of management … Lloyds should be suing [them] not protecting them using taxpayers’ money.’
Lloyds said: ‘We do not intend to comment in relation to the position of former directors of HBOS and their legal fees.’ But it added: ‘It is not unusual for public companies to cover the costs of a director’s legal fees where appropriate.’
RBS declined to comment.