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British judge delays trial of RBS shareholder lawsuit to 2017

By Kirstin Ridley

LONDON, Nov 26 (Reuters) - A High Court judge on Thursday delayed the trial in a drawn-out battle between Royal Bank of Scotland and shareholders, criticising the lender and its legal advisers for being "unfocused" and swamped by 25 million documents.

Thousands of shareholders are claiming around 4 billion pounds in compensation and alleging that RBS's 12 billion pound ($18 bln) investor cash call in 2008 - launched just before the bank's near collapse - contained misstatements and omissions.

Judge Robert Hildyard adjourned the date for the high-profile trial by three months to March 6, 2017, saying he wanted to ensure fair and orderly legal proceedings in the case.

"I would accept that the root of the problem that has ... apparently swamped the defendants and their advisers has been the enormous disclosure process - revealing, I am told, some 25 million documents, of which some 10 million are classed as 'unique'," Hildyard said in a High Court judgment.

Hildyard said the defendants' response to requests for documents, search terms and custodians "appears not to have been informed by any sufficient early attempt to grasp what would truly be involved" and called their approach "diffuse".

The judge, who only delayed the planned trial reluctantly, said there appeared to be an "unfocused disclosure process", which had "fanned out exponentially and extravagantly without sufficient control and direction."

He urged both sides to take tighter control of the group action, which has been years in preparation, and told them to start by disclosing the identities of proposed witnesses.

The bank's near-failure at the height of the credit crisis, averted only by a 45 billion pound taxpayer-funded bailout, threatened to fell Britain's financial system.

RBS, advised by lawyers Herbert Smith Freehills, rejects the allegations in the case.

"We are pleased that the judge has allowed our application for an extension to the timetable and acknowledges that this is a large and complex case," an RBS spokeswoman said in an emailed statement.

"The volume of document disclosure required has vastly exceeded all expectations in terms of scale, time and resource and to date we have reviewed 10 million documents and supplied more than half a million documents to the court." ($1 = 0.6622 pounds) (Reporting by Kirstin Ridley; Editing by Susan Fenton)

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