The presiding judge in the abortive lawsuit brought against the Bank of England by the liquidators of the Bank of Credit and Commerce International revealed yesterday that he had sought advice from the Lord Chief Justice on how to end the "farcical" claim.
Mr Justice Tomlinson said that, after listening to many weeks of opening submissions, "I became so concerned about the case that I decided both to consult and to warn the Lord Chief Justice about it.
"I told the Lord Chief Justice, then Lord Woolf, that the case was a farce," he said.
He told Lord Woolf that the case "had the capacity to damage the reputation of our legal system".
They discussed whether they could do anything "to persuade the liquidators of the folly of their enterprise".
The judge said he took full responsibility for the conclusion that nothing could be done - the BCCI liquidators (accountants Deloitte) were represented by a legal team of the greatest eminence.
The hearing ran for another year, clocking up a total of 256 days in court and an £80 million legal costs bill for the Bank of England, before the liquidators withdrew their claim on November 2 last year.
Mr Justice Tomlinson, in a ruling on the massive legal costs of the case, said that the 42 Bank officials who had been accused of widespread dishonesty in allegedly failing to regulate the fraudulent activities of BCCI "should be exonerated of the grave allegations made against them".
He ordered the liquidators to pay the Bank's costs on an "indemnity" basis - the highest scale of costs which, he said, although not intended as a punishment, "does carry at least some stigma".
The liquidators withdrew their claim against the Bank, brought on behalf of depositors who lost out when BCCI went bust in 1991 with debts of £10 billion, following a ruling by the Chancellor of the High Court, Sir Andrew Morritt, that it was no longer in the best interests of creditors to continue the litigation.
The case was just part of a worldwide operation by the liquidators to recover depositors' money.
At a costs hearing in the absence of the liquidators earlier this year, Nicholas Stadlen QC, for the Bank, said their stated reason for not appearing in court on that day was that, the lawsuit having been withdrawn last November, they could not spend any more money pursuing the case on behalf of BCCI's creditors.
But he said this "plea of poverty" rang hollow in the light of the £184 million fees received by Deloitte during the entire BCCI liquidation and a reported £56 million received in the 12-year litigation against the Bank. ..SUPL: