Lloyds ordered to reveal HBOS takeover legal advice

Lloyds Banking Group has been ordered to reveal legal advice it received in the run-up to its takeover of Scottish bank HBOS during the 2008 financial crisis.

Mr Justice Nugee, in a pre-case hearing at the High Court in London, ruled in favour of the Lloyds Shareholder Action Group, who have demanded access to the legal advice as part of the lawsuit they’re preparing against the banking group.

Helen Davis QC, for Lloyds, failed to persuade the court that the professional legal advice from Linklaters was privileged.

However, Lloyds has confirmed it will “robustly contest” the coming lawsuit.

Around 6,000 shareholders claim Lloyds breached its duties by failing to advise them of serious financial problems at HBOS, including its reliance on lifelines from the Bank of England and US Federal Reserve, as well as a £10 billion loan from Lloyds.

Alan Steinfeld QC, representing the shareholders, told the High Court that Lloyds “deliberately chose not to disclose” details which would have shown “HBOS was teetering on the brink of collapse”.

An extraordinary general meeting (EGM) of shareholders backed the HBOS takeover, but Mr Steinfeld said that “shareholders were not given the information they should have been given when deciding how to vote”.

Scottish Financial News reported yesterday that a 500-page report into the collapse of HBOS has been delayed again and may not be published until 2016.

A spokesperson for Lloyds Banking Group said: “The group’s position remains that we do not consider there to be any legal basis to these claims and we will robustly contest this legal action.”

Share icon
Share this article: