The RBoS Shareholders Action Group will on April 30 close the door on its £4 billion claim against Fred Goodwin and three other former RBS directors on behalf of 12,000 small investors and 100 large shareholders, including local authority pension funds, churches, charities, and several major Scottish institutions.
The group says a six-year timebar will come into effect next week and that "this type of case is often resolved by settlement and only those involved in the action can benefit" .
Small shareholders who bought up to 20,000 RBS shares in the rights issue six years ago have to stake £800 as a membership fee to join the group action.
The group says that if it wins the case, members could expect to be refunded 75% of the fee.
Full recognition of the losses sustained would mean a refund of the difference between the issue price of 200p and a current market value.
Someone who took up 1000 shares and has sold none of them could receive £2370 for a net outlay of £200, the group says.
On its legal case it says: "Our legal advisers are confident that we have a strong case and this view is supported by the many financial industry experts who are members of this group."
RBS however says it has "substantial and credible legal and factual defences".
The action group made an important breakthrough a month ago when it secured a £23.5million package of after-the-event insurance and indemnity cover, to protect its members against the possibility of an adverse costs order from the court.
It says over 63,000 small shareholders were damaged by the rights issue including 1729 living in Edinburgh who held 5.58m shares (an average 3227 each) and have suffered losses of £9.49m (an average £5,488) and 1399 people in Glasgow with 3.73m shares and £6.34m in losses (an average £4,531).
The group says many more people were affected by pension scheme losses. It maintains that RBS and its directors including Fred Goodwin, Tom McKillop, Johnny Cameron, and Guy Whittaker misled shareholders by misrepresenting the underlying strength of the bank and omitting critical information from the 2008 rights issue prospectus, thereby knowingly creating a false market in the shares.
The bank had claimed it did not need the cash urgently, but within months the shares which had been priced at 200p had plummeted to 30p as the government rescued the insolvent bank with a £45bn bail-out and took a stake of 82%. To win the case however the group must prove that the directors intentionally made "recklessly optimistic statements which gave a grossly misleading impression" of the bank's true solvency.
It probably also has to prove that the bank's all-important capital ratio was in reality below the regulatory minimum of 4% at the time of the issue, which meant the bank was technically insolvent and the directors were aware of that.
Fred Campbell, group spokesman, said: "Our claim is already progressing through the courts. The group is well funded and, with appropriate insurance in place, can afford to fight tooth and nail with RBS on behalf of its members.
"For those who feel misled by the bank and its directors, now is the time to join our claim and fight for compensation."
Bryan Johnston at brokers Brewin Dolphin in Edinburgh has said shareholders' ire is understandable, but "the bottom line is they have to prove that the directors of the day actually knew that the document was fraudulent".