BCCI’S liquidators yesterday lost a bid to freeze the Bank of England’s expenses after the collapse of their 12-year legal battle earlier this month.
The BoE is seeking more than £70 million in costs after Deloitte Touche Tohmatsu abandoned its claim that regulators failed to properly supervise BCCI before it was shut down in 1991 with as much as $16 billion in debt, one of the largest-ever banking failures.
But Justice Stephen Tomlinson yesterday rejected Deloitte’s application for a two-week “cooling-off period” to make a settlement offer over the expenses, saying there was “overwhelming public interest” in resolving the case as quickly as possible.
Deloitte dropped its £850m claim against the BoE, the first ever brought against it, on 2 November after receiving a legal ruling that it wouldn’t be in the best interests of BCCI’s creditors to continue with the lawsuit.
Deloitte’s lawyers argued at the High Court hearing that a ruling freezing the Bank’s costs for two weeks would save it as much as £1m at the rate it was accruing expenses during the trial.
But Nicholas Stadlen QC, for the BoE, told the court: “It is bog standard for desperate litigants who are facing down the barrel of a gun to seek adjournments and the usual excuse is the possibility of some hypothetical settlement.
“The idea that after 12 years of litigation and nearly two years of trial what the parties needed is a 14-day cooling off period is really laughable.”
Stadlen also said that the BoE would seek a payment of £32m in interim costs currently being held in a joint account and would apply to the court for an additional interim payment.
It is seeking the maximum amount recoverable, on the grounds that Deloitte’s allegations were “wholly without merit” and that the accounting firm deliberately courted publicity for the case.