Despite having to pay £15 million ($25.5 million) to settle a legal dispute with a former employee, Rathbones saw its profits before tax rise 32.2 per cent for the six months to the end of June.

Despite having to pay £15 million ($25.5 million) to settle a legal dispute with a former employee, Rathbone Brothers saw its profits before tax rise 32.2 per cent for the six months to the end of June.

Rathbones said in a statement that it had agreed to pay the amount to settle legal proceedings in Jersey involving an employee of a former subsidiary, Rathbone Trust Company Jersey.

The claim has so far cost Rathbones £5 million in legal fees. The firm said it will report the settlement amount as an exceptional cost in its full year results

Philip Howell, chief executive of Rathbones, said that the settlement was in the “best commercial interests of the company”.

"We are pleased to have closed off this long-running matter and to have removed this uncertainty from our business. Whilst we believe that the underlying Jersey claim would eventually prove unsuccessful and that effective insurance cover would be confirmed following the recent Appeal Court hearing, we have been mindful that litigation is never without risk and that we could face several more years of very substantial legal expense, having already incurred legal costs of approximately £5 million,” said Howell.

Results

Rathbone Brothers profit before tax for the six months ended 30 June jumped 33.2 per cent to £30.9 million, compared to £23.2 million in 2013.

The firm said in its half-yearly financial statement that total funds under management at 30 June were £23.9 billion, up 8.6 per cent from £22 billion at the end of last year.

This compared to a decrease of 0.1 per cent in the FTSE 100 Index of blue-chip stocks and an increase of 1 per cent in the FTSE WMA (formerly APCIMS) Balanced Index over the same period, the firm said.

Rathbones said that it had now completed the acquisition of Deutsche Asset & Wealth Management's London-based private client investment management business Tilney, which added £617 million of funds under management.

The acquisition of the private client and charity investment management business of Jupiter Asset Management is expected to be completed at the end of the third quarter. Jupiter has discretionary and other managed funds under management of £1.6 billion, with a further £0.5 billion in execution-only accounts. These funds under management will transferred to Rathbone Investment Management.