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Last Updated: Wednesday, 2 November 2005, 18:01 GMT
The end of an epic

Analysis
By Rory Cellan-Jones
BBC News business correspondent

It has been a case of epic proportions.

Bank of England governor Mervyn King
Mervyn King wants Deloitte to foot the bill

Thirteen years have passed since the liquidators of the Bank of Credit and Commerce International began their suit against the Bank of England.

The case finally came to court in January 2004. And now it has collapsed, after the two sides racked up legal bills of more than 100 million.

It might not have lasted quite as long as Jarndyce v Jarndyce in Charles Dickens' epic novel Bleak House - but the BCCI case has been hugely more expensive, earning millions for some of the country's top barristers.

The liquidators had accused the Bank of England of leaving an "unsupervised monster on the loose" after BCCI collapsed in 1991, leaving creditors owed more than 9bn ($16bn). They sued the Bank for 850m. Bank officials, they said, had been acting in bad faith.

Throughout the case successive governors of the Bank have steadfastly rejected the allegations, accusing the liquidators Deloitte of launching a costly and wasteful action.

Now the Bank - which usually speaks in the most coded and measured language - is celebrating what it describes as the "unconditional surrender" of its opponent.

Anger

When I spoke to the current Governor, Mervyn King, in his office at the Bank this afternoon the anger he felt about the conduct of the case was clear.

"We felt strongly that this case should never have been brought," he said.

BCCI logo
BCCI's services were widely used for nefarious purposes

"They accused 22 decent, hard-working officials, trying to do their best, of dishonesty. That's a very serious allegation."

The accusations had hung over the officials for more than 12 years, he said, and in some cases their health had been affected.

Who pays?

The liquidators argue that it was partly the fault of the Bank that the case lasted so long.

"Complete nonsense," said Mr King. "They are the ones who have dragged it out." The governor went on to suggest that the whole legal system would have to learn lessons from this case.

The only issue remaining is that of who foots the huge legal costs - which, in turn, will continue to mount as the barristers for both sides present their arguments before Mr Justice Tomlinson.

The Bank of England says taxpayers should now be recompensed by Deloitte, and legal experts think it's likely the judge will agree.

But Deloitte insists that it has been right to pursue all possible ways of recouping money. BCCI's creditors, it points out, have so far been repaid 81p for every 1 they lost.

But this mammoth case has ended with nobody benefiting. Except, of course, for the lawyers.




SEE ALSO
BCCI liquidators drop 1bn case
02 Nov 05 |  Business
Witnesses summoned in BCCI trial
12 Jun 05 |  Business
BCCI's big day in court
13 Jan 04 |  Business

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