UK court: ex-RBS chief can't be called a banker

By Robert Barr
Associated Press / March 11, 2011

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LONDON—For Fred Goodwin, "banker" is not exactly a secret identity.

But on Friday, the former chief executive of the Royal Bank of Scotland, who led the company to the biggest corporate loss in British history, was the talk of London financial circles amid revelations he was granted a secret court injunction that barred the media from identifying him as a banker.

It all backfired spectacularly when Liberal Democrat lawmaker John Hemming revealed the existence of the injunction on Thursday, using the shield of parliamentary privilege to say whatever he wished. Newspapers and other media chimed in, as they are permitted to report on anything said in Parliament.

Goodwin was RBS's chief when it racked up the record losses and was rescued by the government in the nation's biggest bank bailout. Before the collapse, he was knighted for services to banking.

Back then, Goodwin, known as "Fred the Shred" for his vigorous cost-cutting at RBS, was pilloried in the press for leaving the bank with a fat pension. Now he's back in the spotlight for his efforts to stay out of it.

"Failed RBS banker Fred the Shred cost you billions. But he's got a legal gag to stop him being called a banker," The Sun commented.

The Daily Mail's report on the injunction took the opportunity to identify Goodwin as "disgraced banker."

The Daily Telegraph said Hemming's disclosure raised questions about what other information Goodwin was trying to protect. "The Daily Telegraph is prevent from disclosing any details under the terms of the order," it said.

The Financial Times had a photo of Goodwin on its front page, and this comment on an inside page: "It says something about the tangled state of Britain's privacy laws that the country's most notorious banker had managed to obtain a super injunction to prevent newspapers from naming him as a banker."

The injunction, which would have been widely distributed to media organizations, had also barred reporting the existence of the injunction.

Reporting of a person's occupation can be barred to prevent "jigsaw identification," in which other media organizations aware of the injunction might disclose other facts which could be pieced together to identify the person.

In this case, Hemming apparently saved everyone the detective work.

"In a secret hearing, Fred Goodwin has obtained a super-injunction preventing him from being identified as a banker," Hemming said in the House of Commons. "Will the government hold a debate, or make a statement, on freedom of speech, and whether there is one law for the rich, such as Fred Goodwin, and another for the poor?"

Hemming shed no light on why Goodwin had sought the order, or what other issues were involved in the case. British media reported Hemming's comments but did not give further details of the order.

Goodwin left RBS with a pension of 703,000 pounds ($1.1 million) per year after leading the bank on an expansion spree culminating in the disastrous takeover of the Dutch bank ABN Amro. Write-offs on that deal helped swell RBS' losses for 2008 to 24.3 billion pounds, a U.K. record.

Goodwin later agreed to scale back his pension to 342,500 pounds per year, after collecting a lump sum payment of 2.8 million pounds.

A senior English judge, David Neuberger, is leading a committee of judges and lawyers charged with examining the use of injunctions and so-called super injunctions to curtail reporting on contentious topics. The panel's report is expected to be published in coming weeks.

The use of injunctions has been exposed in several high-profile cases, including one in which the oil-trading company Trafigura obtained a court order prohibiting The Guardian newspaper from reporting allegations about the company's role in dumping toxic waste in West Africa. That injunction came to light after another member of Parliament asked a question about the case.

Last year, high-profile soccer player John Terry was removed as England national team captain after a High Court judge lifted an injunction barring news organizations from reporting details of his alleged affair with the mother of a teammate's child.