News Release
Judgment in BCCI Liquidators’ Case against the Bank of
England
12 April 2006
The liquidators of the Bank of Credit and Commerce International unconditionally discontinued their action against the Bank of England and 22 of its present and former staff on 2 November 2005. In a judgment delivered this morning, the Judge in the case, Mr Justice Tomlinson, sets out the reasons why he completely exonerated all of the individuals involved, and the Bank. The publication of his formal judgment brings to an end the BCCI litigation, believed to be the longest and most expensive trial in the Commercial Court.
In his 86 page judgment Mr Justice Tomlinson, says (paragraph
23):
“I became so concerned about the case that I decided
both to consult and to warn the Lord Chief Justice about it.
I told the Lord Chief Justice, then Lord Woolf, that the case
was a farce.” In the same paragraph he says “I told
the Lord Chief Justice that the case as it was being pursued
before me bore little or no relation to that which the House
of Lords had considered fit to proceed to trial. I warned the
Lord Chief Justice that the case had the capacity to damage
the reputation of our legal system.” The judge also refers
to the “myriad hopeless inconsistencies and implausibilities
in the liquidators’ case.”
Mervyn King, Governor of the Bank of England, says:
“ The Judge’s words speak for themselves. It
doesn’t need any further comment from me.”
Appendix – historical facts about the case
- BCCI was closed by the Bank of England in 1991 after major
frauds came to light. The Bingham Report was published in
October 1992.
- The action against the Bank of England by the Liquidators
of BCCI was announced in 1993, and the trial started in the
High Court in London on 13 January 2004 before Mr Justice
Tomlinson.
- The action brought by the Liquidators accused the Bank of
England and 22 present and former staff members of misfeasance
in public office. This required the claimants to prove bad
faith amounting to dishonesty on the part of the Bank and
individual officials. In addition to alleging that they acted
dishonestly in the period prior to the closure of BCCI in
1991, it was also alleged that they had been lying about their
involvement in the BCCI story as part of a cover-up since
1991.
- The Bank applied to have the claim struck out. In March
2001 the House of Lords (by a 3/2 majority) found in favour
of the Liquidators on the basis that the Liquidators should
be allowed their day in Court. (The Commercial Court Judge
and the Court of Appeal had previously struck out the claim
after lengthy hearings and detailed judgements, but were overturned
by the House of Lords.)
- Mr Justice Tomlinson was appointed as the Trial Judge in
2001 and conducted his first Pre-Trial Conference in November
2001. He conducted a whole series of such Pre-Trial Conferences
throughout 2002 and 2003.
- The Liquidators had a formidable legal team of QCs, barristers
and solicitors led by Gordon Pollock QC, Lord Neill QC and
Clare Montgomery QC.
- Gordon Pollock QC addressed the Court for a record 86 days
stretching from January through to July 2004. That record
was broken by Nick Stadlen QC for the Bank who addressed the
Court for 119 days from July 2004 to June 2005.
- The Liquidators called no witnesses. No witness went into
the witness box to give evidence in support of the Liquidators’
case.
- Brian Quinn was the first witness for the Bank. He gave
evidence from 13 June 2005 to 29 July 2005. Almost all that
time was spent in cross-examination by Clare Montgomery QC.
- The Bank’s second witness was Peter Cooke who gave
evidence from 26 September 2005 to 2 November. Almost all
that time was spent in cross-examination by Gordon Pollock
QC.
- Peter Cooke attended the hearing on 2 November expecting
that his cross-examination would continue for several weeks
more. Without any warning, the Liquidators announced that
they were unilaterally and unconditionally discontinuing the
action.
- On 31 January 2006 the Judge ordered the Liquidators to
pay the Bank’s costs on an indemnity basis.
- When an action is discontinued by the Claimants, it normally brings the case to an end without the Judge delivering any judgment. This case however is in a league of its own. It has taken up an enormous amount of Court time over the years since 1993. Mr Justice Tomlinson has been closely involved with the case since 2001. He said on 2 November that he was in no doubt that the very serious allegations of impropriety and dishonesty against the Bank and 22 of its officials were wholly without foundation. Today’s judgment sets out his reasons.
