BCCI case begins this week
12 January 2004
Former shareholders in the collapsed bank BCCI go to court this week in an attempt to recover some of their money from the Bank of England.
Deloitte and Touche is pursuing an £850 million claim against the Bank, accusing it of “misfeasance” - a more serious species of negligence.
Stan Monaghan, a member of the creditors' committee and a former employee of Bury Council, which lost £7 million in the scandal, told the Times newspaper, “I think it's going to be a long slog.”
However, Mr Monaghan insisted that he was “as optimistic as you can be when taking on the Bank of England.”
Deloitte's case will question the Bank's acceptance of BCCI's contention that it was based in Luxembourg - and therefore outside the Bank of England's full regulatory reach - when it's primary place of business was the UK.
The Bank is expected to argue that it made a mistake in handling BCCI, but that it was not deliberate or culpable - a position supported by Law Lord Lord Bingham's 1992 report into the collapse.
The case is significant, because there is as yet no precedent of a bank successfully being sued for misfeasance.