Deloitte to be spared BCCI bill

Deloitte will return to court to fight the most expensive legal bill in UK history for BCCI early next year – but it will escape paying part of the enormous costs.

The Bank of England has told Accountancy Age that it will not push for Deloitte to pay any of the £70m costs arising from the case.

Last week, Mr Justice Tomlinson set a start date of 30 January for the costs case on Deloitte’s action as liquidator of BCCI against the Bank of England, with proceedings expected to last up to four days.

Next year’s hearings will determine who foots the bill for the bank’s estimated £70m legal fees, with the bank pushing for the liquidated estate of BCCI to pay all costs incurred since 1993 plus interest, on an indemnity basis.

It had been thought that Deloitte could be liable for some of the costs after prolonging the case, suppposedly against the wishes of BCCI creditors.

But a Bank of England spokeswoman said: ‘That is for the judge to decide. We are claiming against BCCI SA in liquidation.’

Lawyers believe that a move by the judge to award costs against the liquidator would be unlikely and unprecedented. ‘It would be absolutely extraordinary if office holders were personally liable for these costs,’ said one lawyer close to the case. ‘It goes without saying that Deloitte had a very strong team on this and they wouldn’t push it beyond what the creditor committee had wanted.’

At a court hearing last Friday, lawyers for the liquidators asked for a two-week ‘cooling-off’ period in which a settlement could be reached, but this was dismissed by the judge.

The Big Four firm refused to comment whether it was in negotiations with the bank over a settlement, while the bank’s spokeswoman said it was ‘actively proceeding towards the costs trial on 30 January’. She added that, if an offer was put forward it may be considered, ‘but we make no commitment to that’.

Deloitte’s case against the bank collapsed at the beginning of November after a 12-year legal battle that saw fees for both sides reach a staggering £100m.

The liquidators had initially claimed the bank failed to protect investors when BCCI collapsed in 1991, but dropped the case saying it was no longer in the best interests of the creditors to continue.