IT would have been a sensational spectacle: the disgraced banker Fred Goodwin and other directors of The Royal Bank of Scotland being cross-examined in court about the months leading up to the bank’s collapse. Many RBS customers and investors would also have relished the sight of Mr Goodwin and his colleagues being ordered into a court room, especially as not a single bank executive has faced civil or criminal action over those catastrophic events of 2008.

However, it now looks like the court case will not happen after all following a settlement reached by the group of shareholders who were pursuing the £700million High Court lawsuit. The 9,000-strong RBS Shareholders Action Group had been suing over the rights issue launched in June 2008 which raised £12billion for the bank but which, according to the action group, was based on untrue or misleading statements about the financial standing of RBS. A few months after the money was raised, the bank had to be bailed out by the state at a cost of £45bn.

For the shareholders, the last-minute settlement is a mixed result. The 82p a share which they have accepted is almost double the original offer made by RBS, but it is also less than the 92p a share compensation which some investors wanted and considerably less than the 200-230p they paid to buy the shares nine years ago. There will also be some observers who might struggle to feel a lot of sympathy for the shareholders involved in the case – if investors are happy to take rewards, they must surely also be prepared to accept the risks.

But what of the taxpayers who bailed out the bank nine years ago – is the settlement a good result for them? In one respect, the deal does at least limit the Royal Bank of Scotland’s legal bills, which are, of course, mostly paid for by the taxpayers. On the other hand, the cost so far of defending Mr Goodwin and his colleagues has already topped £100m – the bill for Mr Goodwin alone being £6.5m - and that is hard to stomach, settlement or no settlement. Should a state-backed bank really be spending millions to defend one of the architects of the financial crisis?

The ongoing cost of the case is also hard to take at a time when there is still no sign of the Royal Bank of Scotland emerging from the long-term consequences of the 2008 crisis – indeed, the prospect of RBS returning to private ownership looks further away than ever. Should the High Court case have gone ahead this month, much of the evidence would have focused on RBS’s takeover of the Dutch bank ABN Amro, and RBS, its staff and customers, are still paying the price of that decision.

However, at the same time, the fact that the bank is still making losses is largely due to the UK Government forcing it to sell off overseas businesses such as Citizens in the US. The aim of that decision was to force RBS to re-focus on its “core” British business, but it also deprived the bank of businesses that could have offered the potential for future growth and a way back to profit and, nine years on from the crisis, the outlook for RBS remains bleak. Thanks to the settlement reached this week, 9,000 shareholders have recouped some of their investment. The taxpayer is still waiting.