Deloitte to be spared BCCI bill
Bank of England will not pursue Big Four firm for any part of record £70m costs in BCCI court case
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.