BCCI

[liadnan]

Not sure where this came from but looks genuine. Mainly for my own future perusal.
In other news I have just booked myself a mini-adventure in France this weekend.

Wednesday, 2nd November 2005
(10.30 am)

MR PETER COOKE (continued)

Cross-examined by MR POLLOCK (continued)
MR JUSTICE TOMLINSON: Good morning, Mr Cooke. Good
morning, Miss Montgomery.
MISS MONTGOMERY: I am sorry, I suspect Mr Pollock might be
going by the clock. I wonder if your Lordship can just
rise so I can find out where he is.
MR JUSTICE TOMLINSON: Well, that seems fair.
(10.27 am)
(A short break)
(10.28 am)
MR JUSTICE TOMLINSON: Yes, Mr Pollock, good morning.
MR POLLOCK: My Lord, as your Lordship knows, the
liquidators are officers of the court and from time to
time seek the guidance and direction of the chancellor.
The liquidators applied to the court for directions.
That application came before the chancellor and was
heard over a period of three days. The chancellor heard
the arguments of the liquidators, the Luxembourg
liquidators and the English liquidation committee. In a
reserved judgment given earlier today, he held that it
was no longer in the best interests of the creditors for
the litigation to continue, and he directed that the
action be discontinued.
MR JUSTICE TOMLINSON: I see.
MR POLLOCK: The proceedings before the chancellor are
private, but he has authorised a statement in these
terms, and I can say nothing more.
MR JUSTICE TOMLINSON: You mean the terms you have just read
out?
MR POLLOCK: Without running the risk of being in contempt
of court.
MR JUSTICE TOMLINSON: I see. So the proceedings are at an
end, subject to any further applications that may be
made?
MR POLLOCK: Yes, and I should simply say that any such
applications, my Lord, would have to be made in due
course, and in proper form, because, of course, of the
necessity of ensuring that the chancellor has
an opportunity to give any such directions as he would
wish.
MR JUSTICE TOMLINSON: Right. Do I follow from that that
the formal position is that you will serve notice of
discontinuance?
MR POLLOCK: My Lord, we may already have done so. If not,
it is being done, I think, even as we speak, so I would
simply ask your Lordship to rise so that we may clear
our stuff away and leave, since we in fact have no more
instructions, we are no longer instructed to stay there.
MR JUSTICE TOMLINSON: First of all, before I do that ^
whether there are likely to be any ancillary
applications that I may have to deal with.
MR STADLEN: Yes.
MR JUSTICE TOMLINSON: I only say that because if there
are -- I mean, if the matter is completely at an end and
my involvement is at an end, there might be certain
things I would say in bidding Mr Cooke fairwell.
If there are likely to be further matters of which
I am seized, which I shall have to consider, I shall
consider my language with care -- with more care.
MR STADLEN: There is a great deal that has to be said on
behalf of the Bank, and there are applications that will
be made on behalf of the Bank to your Lordship
consequent upon the order of discontinuance, as
your Lordship knows -- well, your Lordship may not know,
first of all, that the Bank has had absolutely no prior
notice of this capitulation, not even five minutes, not
even when my learned friend Miss Montgomery was in court
at 10.29.
The position is, as your Lordship knows, that the --
under CPR 38.6, the discontinuance by the claimants of
their claims carries with it an automatic presumptive
liability to pay all the legal costs incurred by the
Bank in defending this action.
MR JUSTICE TOMLINSON: Yes.
MR STADLEN: The Bank will be making applications to
your Lordship, and there is a great deal that in due
course the Bank wishes to say, and indeed there are some
things that the Bank wishes to say in any event, as it
were, before due course.
MR JUSTICE TOMLINSON: Yes.
MR STADLEN: But it may be that the appropriate thing is
that your Lordship should rise shortly to give me
an opportunity to take instructions, and then we would
invite your Lordship to hear what we have to say.
MR JUSTICE TOMLINSON: Yes, well, we need not detain
Mr Cooke any longer, need we?
MR STADLEN: We certainly need not detain Mr Cooke.
MR JUSTICE TOMLINSON: Well, Mr Cooke, you have heard what
has happened. I shall choose my words with great care,
as you will appreciate, there are, as it is apparent,
certain further matters which I may have to consider.
Obviously you are now released from any further
attendance, the action is at an end.
I will just say this, Mr Cooke, there have been some
very, very serious allegations made against you, and
indeed against your colleagues. I have been studying
the documents in this case now for a very long time,
I have heard detailed submissions on them from both
sides, I have heard you give evidence for, I think it is
now 20 days, and I heard your former colleague Mr Quinn
before you give evidence for 28 days.
Although obviously I would have to consider further
developments, had the trial continued, although
obviously I would have had to consider further
submissions in due course, my careful study of the
documents and my consideration of them, and of all the
inherent probabilities, and my consideration of
Mr Quinn's evidence and of your evidence, have left me
in no doubt that the very serious allegations of
impropriety and dishonesty against you are wholly
without foundation. I do not think I shall say any
more.
A. Thank you very much.
MR JUSTICE TOMLINSON: I propose to rise now, and you will
let me know if there is anything further I need to deal
with today.
MR STADLEN: My Lord, yes, there will be. Perhaps we could
let your Lordship know through the usual channels.
MR POLLOCK: And your Lordship will no doubt take it as no
discourtesy ^.
MR JUSTICE TOMLINSON: Well, you have no further
instructions to be here.
MR POLLOCK: Exactly, my Lord.
MR JUSTICE TOMLINSON: No, I will certainly not interpret it
as any discourtesy. Whether it should be right that
some observer ^ merely to hear what is being said or
what further applications are to be made is of course
a matter for you, but I shall not obviously interpret it
as any discourtesy.
MR POLLOCK: It is not a question just of instructions,
my Lord, it is a question of sanction, as you will
understand.
MR JUSTICE TOMLINSON: Yes, but I shall understand, if you
are not here, you are not here, and I shall certainly
not regard it as any personal discourtesy on anyone's
behalf.
Right, thank you very much, I will await
developments.
(10.35 am)
(Hearing adjourned)
(10.45 am)
(11.05 am)
MR JUSTICE TOMLINSON: Yes, Mr Stadlen?
MR STADLEN: My Lord, I apologise for the delay, but
arrangements were made to put Messrs Lovells on notice
that we were going to be addressing your Lordship and to
give them an opportunity to be represented if so
advised.
MR JUSTICE TOMLINSON: Right.
MR STADLEN: I can repeat that the Bank had no more notice
than your Lordship did this morning that the liquidators
were planning to discontinue this action, and I should
just mention, because your Lordship may have noticed the
Governor of the Bank of England in the back of court --
MR JUSTICE TOMLINSON: I had decided not to mention that,
although I had wondered.
MR STADLEN: I should therefore indicate, for the avoidance
of any doubt, that in one of those rare coincidences in
life, this was arranged last week in order to show
a foreign law student the way in which the Commercial
Court operates, and has absolutely nothing to do with
the bombshell that was announced 35 minutes ago.
MR JUSTICE TOMLINSON: In view of what you said, I assumed
that must be the case.
MR STADLEN: Indeed. My Lord, as your Lordship knows -- and
I should make plain that what I am about to say is
scripted, and the reason it is scripted is that
notwithstanding having had not a minute's notice of
this, it will have occurred to your Lordship that it has
occurred to the Bank for no small time that there was
always a possibility that the liquidators might
discontinue this action.
As your Lordship knows, the original writ in this
action was issued as long ago as 24th May 1993. Today,
over 12 years later, the claimants have, by their
discontinuance, publicly conceded that the claim against
the Bank is hopeless, and that it cannot succeed.
After more than 12 years, their case has collapsed,
and there should be no mistake, this is unconditional
surrender. It does not represent a settlement of the
action, or any form of agreement or compromise with the
Bank.
It is a unilateral discontinuance and abandonment of
the action, and a withdrawal, as a consequence, of all
the allegations made against the Bank and its officials,
and under CPR 38.6, the discontinuance by the claimants
of their claims carries with it an automatic presumptive
liability to pay all the legal costs incurred by the
Bank in defending this action.
And while first and foremost, the Bank naturally
welcomes the unqualified abandonment of the action, the
withdrawal of the very serious allegations made against
it and many of its officials, and the ending of this
costly and wasteful piece of litigation, it is, in my
respectful submission, nothing short of a scandal that
it has taken so very, very long for the claimants to bow
to the inevitable.
It has always been clear that this case was
hopelessly misconceived and doomed to failure.
Mr Justice Clarke, now, of course, the Master of the
Rolls, set out in great detail why that was so as long
ago as July 1997, and so in 1998 did the majority of the
Court of Appeal, and in 2001, the late Lord Hobhouse and
Lord Millett.
And contrary to the oft repeated shib leth
promulgated by the claimants to your Lordship, the
majority of the House of Lords never held that the
claimants were entitled to proceed to a public trial and
cross-examination, even if the disclosed documents
revealed no basis for maintaining the allegations.
As we have exposed in your Lordship's court, the
documents alone showed that those allegations were
utterly hopeless.
The claimants' discontinuance is a vindication of
the Bank and the 22 impugned officials and of the iron
determination of two successive governors to defend the
action ^ in terms of legal costs and in terms of the
cloud of suspicion hanging over the heads of perfectly
innocent public servants.
For over a decade, the Bank and the gradually
swelling numbers of impugned officials have had to
endure patiently and in silence the publicity which the
claimants have courted for their outrageous and baseless
allegations and now at long last the time has come to
redress the balance. The boot is on the other foot and
the day of reckoning beckons. It is time for the
spotlight to shift to the other side of the court and
for scrutiny to be brought to bear on the manner in
which this hopeless case has been prolonged, long after
its utter hopelessness was apparent for all to see.
It has always been clear to anyone who has read the
Bank's contemporary documents that they provide no
support for the claimants' serious allegations and on
the contrary are in myriad respectser reconcilebly
inconsistent with them. No judge has ever held that
there is any evidence to support the claim and as soon
as the claimants inspected the Bank's documents, the
only proper course was to discontinue the action at that
stage. That was at least a year before the trial of
this action began, and had they dropped the action then,
tens of millions of pounds of costs would have been
saved, nearly two years of court time not wasted, and
the precious time of a Commercial Court judge wasted,
and the utterly groundless allegations of dishonesty
against the Bank and its 22 malined officials would not
have been given the publicity which has been
deliberately courted by the claimants.
The way in which this litigation has been conducted
has been nothing short of disgraceful. Allegations of
dishonesty against decent, hard working, honest
officials have been scattered like confetti, often on
the hoof, with no regard to the distress and upset
caused to the officials and their families, and in that
regard, I can tell your Lordship that there has been
a very great deal of upset caused to officials and their
families.
With no support in the documents, no live witnesses,
of which there were none on behalf of the claimants, and
in many cases, without even any attempt to make them
good in the presentation of the claimants' case to the
court, and a classic example of that was the utterly
outrageous and unpleaded allegation made on Day 5 of the
trial by my learned friend Mr Pollock on behalf of the
claimants that there had been a high level conspiracy,
a dishonest conspiracy at the top of the Bank, to
deceive the Bingham inquiry, an unpleaded allegation
which was withdrawn on Day 6 and which should never have
been made.
Two former officials of the Bank, in their late 60s
and early 70s respectively, with extremely distinguished
careers as public servants behind them, have been
subjected to offensive and derecognise rite allegations
in a public court.
The claimants, by their love of publicity, have
sought to broadcast those allegations as far and wide as
possible, and in her memorable phrase in The Times,
patience wheat croft accurately said that the case has
been a miserable headache for former Bank employees
whose careers brushed BCCI.
The claimants have widened the scope of ^ to include
no fewer than 22 officials of the Bank in a 11-year
period, even though it was clear on the face of the
documents on which they themselves relied that those
allegations were unsupportable.
They included amendments to impugn the honesty of 14
junior or middle ranking officials in a move which the
former Governor, Sir Edward George, as he then was,
described at the time as shabby and disreputable.
Even my learned friend Mr Pollock conceded that the
claimants' last minute allegations against the part 2
officials were in a number of cases based, to use his
word, on slender evidence.
In the event, when it came to it, in most cases, the
claimants did not even try before your Lordship to
justify those allegations, or point to any evidence
which could support findings against them. In no case
was there ever a shred of evidence to justify the
allegations having been made, still less to justify
findings of dishonesty.
And your Lordship will recall the astonishing
process during the course of the opening in which we
revealed to your Lordship, time and time and time again,
that where allegations were made against individual
officials, they were either supported by no particulars,
or the particulars which were relied on to support them
were either complete Gibraltarerish or positively
inconsistent with the allegation being sought to be
made.

MR JUSTICE TOMLINSON: My recollection is that as the case
was developed by Mr Pollock, the allegations of
dishonesty came necessarily to encompass still more
people than the 22 who were identified in the pleadings.
MR STADLEN: Indeed they did, and one of the disgraceful
aspects of the way in which the case was presented to
your Lordship was that allegations of dishonesty were
made on the hoof against people in respect of whom there
had not even been any pleadings, simply in order to
answer the unanswerable question, if there had been
a dishonest conspiracy going on on the part of the 22
named officials, why did the other non-named officials
not spot it?
Every time either the Bank or your Lordship, in
intervention, said, "Well well, what about Mr X, Mr Y or
Mr Z?", the answer was ^.
MR JUSTICE TOMLINSON: Or even the American lady lawyer on
secondment.
MR STADLEN: Or indeed even the lady American lawyer on
secondment. Retired Bank officials all round the home
counties were dragged back into this disgraceful
litigation on the back of allegations supported by, as
I say, evidence which my learned friend himself accepted
was slender, and which when it came to it they did not
even seek to suggest to your Lordship justified
a finding of dishonesty against them.
It has been an abuse of the process. For six
months, a wholly misleading picture was presented to the
court, with not a single reference to the existence, let
alone the contents, of a mass of other documents which
had been inspected by the claimants, and whose contents
were thus known to them, and those documents, when we
came to show them to your Lordship, made a complete
mockery of the claimants' submissions, and when they
were shown to the court by the Bank, it was immediately
apparent that the very heart of their case was
unsustainable, and the most dramatic and obvious example
of that was the disgraceful allegation in respect of the
so-called dawn raid to Basle, the allegation that
Mr Cooke, as chairman of the Cooke committee, had
deliberately set out to deceive his colleagues into
thinking that the Concordat said something which he knew
perfectly well it did not.
That allegation, which had not been pleaded, was
demonstrated to be unsustainable by a stack of
contemporary material, which was well-known to the
claimants, and which, had they been withdrawn to
your Lordship's attention in the claimants' opening,
would have made it impossible for them to even have the
nerve to raise those allegations.
The presentation of the claimants' case was riddled
with inconsistencies which would be comical if they were
not so serious. My learned friend Mr Pollock himself
conceded in his opening speech that the allegedly
dishonest officials were just decent people trying to do
their jobs, a striking phrase, which can have left
nobody in this court in any doubt that the suggestion
that those same people can have had the dishonest state
of mind required to commit misfeasance was simply
absurd.
Indeed, that concession by my learned friend was
hopelessly inconsistent with the claimants' pleaded case
that the same officials acted throughout in bad faith,
and indeed, the sheer implausibility of what they were
seeking to prove is crystallised in one passage of
your Lordship's recent judgment on the Bank's
application to curtail Mr Cooke's cross-examination.
Your Lordship said:
"Mr Pollock emphasises that it is no part of the
claimants' case that Mr Cooke is generally or
congenitally dishonest; rather he submits that Mr Cooke
knowingly bent the rules no doubt for reasons which at
the time seemed good to him."
The problem was that it was the first step on the
slippery slope and it was the subsequent necessity to
behave in order to keep hidden what had happened which
forced Mr Cooke ever further down the path of untruth,
and has led to his now giving dishonest evidence to me.
I should perhaps mention that the reasons which at the
time seemed good to Mr Cooke (check) must have
co-existed with the knowledge on his part that in
consequence of his actions, depositors would probably
suffer loss or at least the recklessness as to the
serious risk which that would eventuate."
In other words, as your Lordship highlighted, the
allegation, totally and hopelessly inconsistent, that
Mr Cooke was dishonest and knew or suspected that
depositors would probably suffer loss, but nonetheless
was acting for reasons which at the time seemed good to
him.
And why on earth should Mr Cooke or any of the
others have been motivated to license BCCI in
circumstances where he or they knew that depositors
would probably suffer loss? Why would he be so utterly
determined to license an institution that he knew or
suspected would collapse, or was at least at serious
risk or collapse, so that he would dishonestly mislead
the Governors of the Bank of England in the process?
The claimants have never had a remotely plausible
answer to this impenetrable conundrum at the rotten core
of their case.
The entirety of my learned friend's factual
submissions, which took up nearly six months of court
time, were directed to proving a state of mind on the
part of the Bank which Lord Neill, astonishingly, also
instructed by the claimants -- not astonishing that he
should be instructed, but astonishing that he should be
making irreconcilable submissions to your Lordship --
conceded would not in law amount to misfeasance in
public office even if it had been proved.
In other words, for six months, Mr Pollock, my
learned friend Mr Pollock, was advancing factual
arguments which my learned friend Lord Neill accepted,
had they been proved, would not have enabled them to
succeed as a matter of law.
MR JUSTICE TOMLINSON: That did strike me at the time as ^
future of the case, Mr Stadlen.
MR STADLEN: If that is not an abuse of process, it is
difficult to know what is, that a litigant should
instruct two leading counsel to argue ^ propositions.
Great swathes of their pleaded case were either recast
or abandoned altogether, leaving with them no cause of
action, and when this was flushed out, the claimants
shamelessly sought to suggest that they had not been
abandoned and to withdraw the concession.
And the most brazen example of that was the
so-called failure to revoke claim, which was the
cornerstone or the flagship of their post-licensing
claim.
Your Lordship will recall that my learned friend
Lord Neill sat silent in court when your Lordship said
that you understood that that claim had effectively been
abandoned by the claimants, and nothing was said to
disturb your Lordship's understanding for days and weeks
of court time, and when, weeks later, they sought to
resile from that abandonment, and to revive the claim,
it was with no credibility whatsoever, as can be gauged
from the fact that as recently as last week's --
your Lordship's judgment of last week, on the Bank's
application to curtail the length of Mr Cooke's
cross-examination, your Lordship did not even mention
the failure to revoke claim when summarising the
claimants' post-licensing claim.
To add insult to injury -- well, all this required
the Bank to spend months hitting the constantly shifting
target, painstakingly setting the record straight,
pointing out in detail the endless ducking and weaving,
and giving chapter and verse to the endless examples of
submissions made by the claimants which were either
inconsistent with the contemporary documents or with
their own pleaded case, or with their own previous
submissions, or in many cases, with all three.
And if the Bank took ten months to open the case, it
was for that reason.
To add insult to injury, even after the full extent
of the hopelessness of their case had been laid bare,
the claimants did not even then have the decency to
abandon the case and apologise to the Bank and the 22
maligned officials. Instead, they insisted on
subjecting Brian Quinn, a thoroughly honest and decent
public servant of great distinction, who was appointed
a CBE in 1996, to the ordeal of cross-examination for no
less than seven weeks, accusing him of dishonesty, lying
and misfeasance.
Indeed, if it had been left to them, they would have
cross-examined him for more than 12 weeks, and as
your Lordship has recently said in the judgment occur
tailing Mr Cooke's cross-examination, Mr Quinn's
cross-examination could in fact have been conducted in a
significantly shorter period.
And even with all they knew about Mr Quinn's medical
position, they still opposed the Bank's application to
limit the cross-examination to seven weeks, and when
your Lordship so ordered, made an appeal against
your Lordship's order which the Court of Appeal
dismissed in no uncertain terms in a judgment in which
they held that your Lordship's heavy criticisms of my
learned friend Miss Montgomery's cross-examination of
Mr Quinn were fully justified.
It was as plain as a pikestaff to everyone who heard
Mr Quinn's evidence that he was transparently honest and
conscientious and that the whole of their case against
the Bank was built on sand, but still they did not
apologise or issue a public acknowledgment that their
allegations were completely misconceived. Instead, they
insisted on bashing on, with no thought to the effect on
the Bank's second witness, Mr Cooke, a 73-year old man,
also a public servant of great distinction, he was
appointed a CBE in 1997, and Mr Cooke was thus exposed
to the completely unnecessary and avoidable stress and
inconvenience of preparing for what the claimants had at
that stage promised would also be more than 12 weeks of
cross-examination.
And then, in the latest grotesque and intimidatory
move, the claimants told your Lordship that they would
wish to continue to cross-examine Mr Cooke until next
February, a massive 16 weeks or 64 days of
cross-examination. And given the pulling of the plug
today, with the implied recognition that the claim was
hopeless, and the revelation by my learned friend
Mr Pollock this morning for the first time to
your Lordship and the Bank that the liquidators applied
to the Chancellor's court for directions, and that there
was a hearing over three days, heard, he said, over
three days, notwithstanding that, the liquidators -- the
claimants resisted the Bank's application to curtail
Mr Cooke's cross-examination, and sought to persuade
your Lordship that they should be entitled to
cross-examine him for 64 days or 16 weeks, a period of
time which your Lordship, in our respectful submission,
quite rightly labelled grotesque, that was
your Lordship's word, grotesque because it was both
unreasonable and inhumane.
Indeed, that is the same epithet that can be applied
to their approach to the Bank's application to curtail
the cross-examination of Mr Quinn, given his medical
condition.
The fact is that right up to the very last court day
before they discontinued, in other words yesterday, the
claimants continued to accuse Mr Cooke in the most
offensive terms possible of dishonesty, giving lying and
evasive evidence to your Lordship.
Indeed, their inhumanity seemed to have no bounds,
dictated either by decency or compassion, and as
your Lordship commented in the curtailment judgment in
respect of Mr Cooke, the manner in which they had sought
to downplay the significance of Mr Cooke's health
problems was unfortunate; indeed it was, and in our
submission, it went even further than that, because as
your Lordship will recall, in resisting the Bank's
curtailment application, they went so far as to accuse
Mr Cooke of deliberately refusing to take medication as
a transparent tactical device designed to persuade
your Lordship to reduce the length of cross-examination.
Your Lordship emphatically rejected that submission,
which was a disgraceful one, which should never have
been made.
In Mr Cooke's case, the prospect of this ordeal was
increased months in advance by the inflammatory and
intimidatory remarks made by my learned friend
Mr Pollock on Day 1 of the trial, when he referred to
litigation as a blood sport, with the claimants as the
unspeakable, and Mr Cooke as the uneatable.
There was also the thoroughly inappropriate comment
made by Mr Greer son of Messrs Lovells to the London
Evening Standard when he said that the impending
cross-examination would be "bloody".
Such comments are highly inappropriate in any piece
of litigation, but the more so when directed to the
media rather than to the court, as so many of the
claimants' efforts have been directed.
It is to be hoped that it is the last of a very long
series of disgraceful features of the claimants' conduct
of this litigation that the towel has unceremoniously
only arrived in the ring at the end of the fifth week of
Mr Cooke's cross-examination, when there is no good
reason why this could not have happened at the beginning
of the summer, sparing Mr Cooke the anxiety associated
with waiting to give his evidence, and then being
cross-examined in the most aggressive and rude terms
imaginable, and accused of dishonesty and lying to
your Lordship.
As recently as 17th October, the claimants made
plain that the primary purpose of their
cross-examination of Mr Cooke was to challenge his
honesty, and they repeated their allegation, as they
have since, that he was central to the misfeasance said
to have been committed by the Bank.
Your Lordship will recall that Mr Pollock did not
shy away from accusing Mr Cooke of perjuring himself in
your Lordship's court.
For nearly five gruling weeks, for five gruling
weeks, Mr Cooke has responded with patience, dignity and
transparent honesty, as your Lordship has already
indicated, to sustained, hostile and at times downright
offensive attempt to blacken his had r hard earned and
well deserved reputation ^ of the highest calibre but,
and this is not an overstatement, as one of the
progenitors of one of the ^.
As with Mr Quinn, the exercise, as your Lordship has
pointed out, failed, but the point is that it should
never have been attempted and it should never have been
sustained as long as it was.
Indeed, in the past few weeks, your Lordship as well
has had to bear the brunt of my learned friend's
discourtesy and indeed downright rudeness, as have the
representatives of the Bank, and that is not something
that should happen in the Commercial Court, as
your Lordship has had occasion to point out at
an earlier stage of these proceedings.
Nothing that has happened over the last few months
has changed the objective prospects of the claimants
proving their case, so that the failure to discontinue
even at the end of July, after they had heard the first
live witness being tested, as they so frequently
protested -- incorrectly protested the House of Lords
had said they were entitled to do, even after Mr Quinn
had had seven weeks of cross-examination, your Lordship
having pointed out that by that time, of course he would
either have been found to be honest or dishonest, and it
therefore would have followed, because of the nature of
the case, that the claim would either have succeeded or
failed, even at that stage, when it was transparently
obvious to everybody in court that Mr Quinn was as
honest as the day is long, just as Mr Cooke subsequently
turned out to be, they did not have the decency at that
stage to discontinue, and any talk of the Vice
Chancellor or applications for directions is a complete
red herring. There was nothing to stop the liquidators
discontinuing these proceedings at a much earlier stage;
indeed, they should never have brought -- they should
have discontinued once they had inspected the Bank's
documents at least a year before the trial began, when
the hopelessness of the allegations was revealed to
them.
The continuation, the failure to discontinue, even
at the end of July, was, in the Bank's respectful
submission, a further cynical exercise in wasting huge
amounts of costs, and disregarding the obvious adverse
effects on the Bank's officials.
The claimants' cynical strategy in this litigation
was vividly illustrated by a comment made by
Mr Richards, one of the liquidators of Deloittes, to the
press in October, criticising the Bank for refusing to
enter into a settlement of the claim. Mr Richards was
quoted as saying, "It is our usual practice to approach
defendants to see if they are willing to negotiate, and
we regret that the Bank has so far refused to discuss
a settlement. The Bank has unlimited public finance at
its disposal, unlike the commercial organisations we
have successfully pursued for recovery".
Today, the claimants' approach, litigation with a
view to obtaining a commercial settlement, induced by
pressure, has finally and justifiably failed.
Discontinuance at the eleventh hour belatedly
reflects what has been obvious to everyone for over
a year, namely that the action was bound to fail. The
question is, why has it taken so long, and why have the
claimants waited until the eleventh hour to throw in the
towel?
That is a question which we will in due course
invite your Lordship to consider. Several possible
explanations spring to mind. Given the way their case
has so spectacularly imploded and the observations
your Lordship has made at various stages in the trial
about the way in which the case has been pursued, and
indeed the observations that your Lordship made this
morning, in which your Lordship said that your careful
study of the documents and your consideration of them,
and of all the inherent probabilities, and your
consideration of Mr Quinn's evidence and of Mr Cooke's
evidence have left your Lordship in no doubt that the
very serious allegations of impropry et and dishonesty
against Mr Cooke are wholly without foundation.
Given all of that, it is easy to understand why the
claimants might now wish to avoid a final judgment and
the criticism of them that it might have contained.
Throughout the course of the trial, the claimants
have conducted an aggressive PR campaign designed to
give maximum publicity and exposure to their unfounded
allegations, including allegations of dishonesty.
As they well know, the only remedy open to those
officials and to the Bank to clear their and its names
is a written judgment from your Lordship exonerating
them and publicly declaring that in the light of the
evidence presented to the court, it is plain that each
of the officials individually and the Bank are
completely innocent of all the allegations made against
them.
Of course, such a judgment would carry with it the
risk that the claimants and maybe others would be
criticised by your Lordship for the manner in which this
litigation has been conducted, and so they have played
their "get out of jail" card by discontinuing the action
and thus seeking to deprive your Lordship of the
opportunity of giving the Bank and the officials the
public exoneration to which they well know they are
entitled.
Instead, they seek to skulk into the shadows with
not so much as an apology, still less any objective and
unspinable confirmation that their allegations were
hopelessly misconceived.
And herein lies the final cynicism of the claimants'
approach to this court and to this litigation.
A resounding judgment rejecting their allegations might
have been regarded by them as increasing their exposure
to the risk of an order to pay the Bank's costs on
a full indemnity basis, and since the Bank's costs are,
given the seriousness and scale of the allegations which
it has had to defend, very substantial, the difference
between standard and indemnity costs is obviously also
itself going to be substantial.
A final judgment would expose the claimants to
criticism. To seek to avoid such criticism at the
expense of depriving the Bank and the impugned officials
of the opportunity of being exonerated by the court in a
reasoned judgment is to add insult to injury, and the
court should have none of it.
The Bank will be making an application for indemnity
costs to your Lordship, and in ruling on that
application, the Bank will ask your Lordship to look at
the claimants' conduct in the round.
Your Lordship's judgment should, in our respectful
submission, in due course, address why the allegations
against the Bank and its officials, made in a public
court and broadcast by the claimants in the media,
apparently with the assistance of a PR agency retained
for that very purpose at the creditors' expense, were
thoroughly unjustified.
There are several reasons why both in the interests
of justice and in the interests of public policy, and
the due administration of justice, it is and remains
a matter of the highest importance that there should be
a written judgment from your Lordship.
First and foremost, the Bank and the impugned
officials deserve no less. The claimants having chosen
to traduce their representations in such a flagrant and
calculated way, they are entitled as a matter of basic
justice to have their reputations exonerated by the
court in no less public a way.
No doubt the small army of spin doctors that once
sought to maximise the publicity for the very serious
allegations made against the Bank is now as I speak
engaged on a damage limitation PR exercise.
A resounding judgment from your Lordship, making it
clear that the allegations were unsupported by the
evidence adduced over nearly two years, would be
incapable of being spun, and in this context, one notes
that the liquidators' case is closed, and was closed
a very long time ago.
Secondly, this is a watershed case. Nearly
two years of Commercial Court time have been wasted by
claimants pursuing a case which was hopeless, and whose
hopelessness was apparent from the disclosed documents.
Before that, the litigation had been persisted in
for an additional 11 years. Misconceived allegations of
dishonesty and misfeasance against a public body, and 22
officials, having been made, two successive Governors of
the Bank took the principled decision not to give in to
the pressure in order to establish the important
principle that speculative damages claims against public
bodies carrying out difficult regulatory functions will
not result in cash settlements.
Your Lordship may recall that Mr Grierson of
Messrs Lovells, on behalf of the liquidators, appeared
on the Today programme on the first morning of the trial
to inform the nation that the Bank knew Lovells'
telephone number, and had only to pick up the phone.
And Mr Richards, the liquidator's, comment shows the
liquidators' disappointment when the Bank refused to
play their settlement game. Their discontinuance today
shows why the Bank was right not to give in to that
pressure.
Third, in addition to a responsibility to defeat
a hopeless and vexatious claim for very substantial
damages, and its understandable determination to protect
the reputation of both the Bank and its officials, these
points of principle explain why two successive Governors
of the Bank have so vigorously and justifiably defended
these proceedings for so long.
Litigation like this should never be allowed to
happen again. The court has a vital role to play in
deterring similar claims in the future, and in
particular, by making it clear that there is no soft
option for claimants of persisting in hopeless and
almost untrybly complex claims, safe in the knowledge
that the claimant can always bail out at the eleventh
hour, and avoid the criticism of the court and maybe
indemnity costs by discontinuing.
The House of Lords has pointed out in the past that
litigants have no unlimited right to the scarce
resources of court time, and indeed, there is House of
Lords authority that it can be an abuse of process to
seek to deprive the court of the opportunity of
delivering judgment by the device of unilateral
discontinuance, and depriving the defendant of the
benefits of having such a judgment.
Fourth, I have in the past identified occasions when
the claimants have tried to play fast and loose with the
court. This, in our respectful submission, is the
ultimate attempt to do so, and the court should have
none of it.
There are some who may say that the way in which the
claimants have so relentlessly pursued a case which has
for so long been so transparently hopeless and then
abandoned it has brought the legal system into
disrepute, and it is striking that Bleak House began on
television last week, the comparisons have been made too
frequently for it to be necessary to elaborate.
In the Bank's respectful submission, after a trial
of 255 days, if you do not count this morning, because
it has been discontinued, the court should not permit
this to happen.
Some 255 days into the trial, and with very serious
allegations of dishonesty having been publicly made and
pursued, without any apparent regard for their effect on
the reputations of those sought to be impugned, the
claimants should not now be able to skulk off into the
shadows, thereby denying the Bank the public vindication
of ^ time and money wasted.
As I say, the Bank intends in due course to make
an application to your Lordship that the claimants
should pay the Bank's costs on an indemnity basis, and
in support of that application, the Bank will rely on
a myriad of points and examples of the unreasonable and
even disgraceful manner in which the litigation has been
conducted, and in giving judgment on that application
for indemnity costs pursuant to CPR 38.6, the Bank will
invite your Lordship to give in summary form if needs be
a reasoned judgment exonerating the Bank and the 22
officials and roundly rejecting the allegations made by
the claimants of the kind which, had it been delivered
at the conclusion of the trial, would have itself have
been a ground for awarding the Bank indemnity costs.
Your Lordship has heard all the evidence which the
liquidators relied on, and your Lordship has heard all
the evidence which the Bank relied on. There is nothing
to stop your Lordship from exonerating the Bank and its
officials and there are very good reasons why
your Lordship should do so.

And last but not least, your Lordship has sat
patiently through nearly two years of this trial, and is
entitled to have your say. It is not for the claimants
to dictate what the court may or may not say, or when it
may or may not say it. And indeed, your Lordship has
already this morning gone a long way to exonerating both
Mr Cooke and Mr Quinn, but as your Lordship appreciates,
the allegations were made against 20 other officials,
and indeed more as the case proceeded.
There are therefore three steps --
MR JUSTICE TOMLINSON: Mr Stadlen, it follows, as night
follows day, that the observations I have made about
Mr Cooke and Mr Quinn apply equally to every officer of
the Bank. I have seen no foundation for any allegation
of dishonesty against any officer of the Bank at any
stage.
MR STADLEN: I am very grateful for your Lordship's
indication. My Lord, there are three steps that the
Bank will in due steps invite the court to take to
address these matters.
First, this is an appropriate case in which the
court should order the claimants on discontinuance to
pay the Bank's costs on an indemnity basis. It will be
necessary to explain to your Lordship in much greater
detail than can be done today why such an order is
justified in this case, and a suitable timetable will be
required to deal with this application on a proper
basis.
Secondly, the court, in giving its ruling on that
application, will be invited to record its views, even
if only in summary form, on the merits of the case
against the Bank, and its 22 officials, before the towel
was thrown in, and thereby provide the Bank and its
officials with a measure of the public vindication which
the claimants have sought cynically to deny the Bank by
discontinuance at this very late stage.
And thirdly, the court should in some way register
its disapproval of the manner in which this litigation
has been conducted in relation to the serious and
unfounded allegations of dishonesty made and pursued
throughout the trial in the face of the wholly
contradictly evidence, and they were sitting in this
court every day as well as your Lordship and as well as
the Bank, and they were able to assess the impact and
import of what transpired (check).
The consequences of the dramatic timing of the
collapse of the liquidators' case this morning will need
to be worked through. The Bank has not had an chance to
give considered and careful thought to the full
ramifications of their abandonment of the case, in terms
of the appropriate consequential orders which should now
be made.
The Bank will need to go back over the awful saga of
this litigation for the purpose of preparing its
application and its submissions, and the Bank will
reflect on the scope of submissions which it will wish
to address to your Lordship, and would suggest that
a date is fixed, and we would suggest Friday of next
week, at which a timetable for a hearing can be
arranged.
These are matters for another day. For today, what
matters is that the charade of this grotesque claim is
finally at an end. Only last month, in the courtroom
immediately above the one in which we stand today,
counsel for one of the defendants in the equitable Life
litigation described the abandonment of that claim as
the biggest climb-down in English legal history, and as
this case has shown on previous occasions, records once
set are there to be broken, and it can be asserted with
complete certainty that the claimants have today
performed the most remarkable and humiliating climb-down
ever to have taken place in any piece of English
litigation.
In fact, the Equitable Life case does not compare.
This action has been persisted in for 12 years, has gone
to the House of Lords three times, the Court of Appeal
six times, and unlike the Equitable Life case, this
action has not been settled by means of a compromise in
which the Bank has waived its entitlement to be
reimbursed its costs by the claimants.
As your Lordship appreciates, the claimants have
unilaterally discontinued the action with the automatic
consequence under CPR that they are presumptively liable
to pay all the Bank's outstanding legal costs, at least
on a standard basis. This represents unconditional
surrender.
Perhaps the most striking feature of the climb-down
is the complete collapse of the claimants' monstrous
allegations of dishonesty. This was not a case about
negligence. As my learned friend Mr Pollock told the
House of Lords last summer, Day 3, page 182, lines 11 to
14, this is not a case about someone may have made
a mistake; our case is that most if not all of the
central supervisors lied to Lord Justice Bingham and
lied and lied again to Lord Justice Bingham. We have
made this as plain as plain can be".
This was a case which involved allegations of
dishonesty (start quote ^) unparalleled in their gravity
and their extent, and an alleged conspiracy involving,
on the pleadings, no less than 22 officials, from close
to the top of the Bank to junior analysts, over
a 11-year period, though as your Lordship observed on
Day 134, page 14, lines 15 to 20, in the oral
presentation of the claimants' case, far more than 22
officials were impugned:
"Practically every time the claimants came across ^
as your Lordship has pointed out this morning, they said
he too was dishonest, no matter how far-fetched, how
unsupported by evidence, and how disgraceful (no quote
^).
This nonsense has now come to an end, and under the
court's rules the automatic presumptive result of this
throwing in the towel is that the claimants are liable
for all the Bank's costs, at least on a standard case.
As to the (standard basis ^) future, the Bank will
take time to consider its response to today's volte
face, but there is nothing that so becomes the
disgraceful nature of the way in which this litigation
has been conducted as the disgracefully long time that
it has taken for the claimants finally to put their
moribund case out of its misery, and the manner in which
the end has finally come.
And one has particularly in that regard -- one takes
note of the fact that as recently as a couple of weeks
ago, the claimants were resisting the application that
Mr Cooke's cross-examination should be curtailed,
notwithstanding his health, notwithstanding his age,
notwithstanding his commitments, and they were seeking
to persuade your Lordship he should be cross-examined
until some time next year, for 64 days.
And even today, we are told that the application for
directions to the Chancellor's court took place over
three days, no attempt was made to contact the Bank to
say, "There is some application going on, and if you
will agree, we will suspend the cross-examination of
Mr Cooke, something can be said to the judge which will
be put in totally neutral terms, so that no inference
can be drawn by the judge", no attempt to spare Mr Cooke
even the last few days of the ordeal of
cross-examination, and as late as yesterday,
Mr Pollock -- my learned friend Mr Pollock was accusing
Mr Cooke in open court of lying, knowing, as he
presumably must then have done, that directions were
being sought in respect of the application that has led
to this discontinuance.
And indeed, while my learned friend said he hoped
that no offence would be caused to your Lordship if they
did not stay to listen, it is possibly -- might be
thought that it speaks eloquently and volumes of the way
in which the claimants have conducted this case that
they have not even had the courage to stand up here --
to sit here in open court and face the consequences of
what they have done.
Final exoneration of the Bank's officials and the
costs consequences of the liquidators' decision are
matters for another day. Today is a day to welcome the
final abandonment of the action; better late than never.
My Lord, we would suggest that possibly Friday of
next week, subject to your Lordship's availability,
might be an appropriate occasion on which to have
a hearing to fix a timetable for leading up to a hearing
on which such applications as the Bank wishes to make
may be heard.
MR JUSTICE TOMLINSON: Yes, on the footing that you would by
then have given notice to the liquidators of the nature
of such applications?
MR STADLEN: Just so.
MR JUSTICE TOMLINSON: Mr Pillow, is there anything you want
to say? Pill pill my Lord, I am neither instructed nor
authorised to say anything.
MR JUSTICE TOMLINSON: No, but I am giving you the
opportunity just in case pill pill I am grateful.
MR JUSTICE TOMLINSON: Yes. Well, now, Mr Stadlen,
I propose to say very little this morning, for a number
of reasons, but mainly because, as I anticipated would
be the case, I am likely to be seized of yet further
applications in which I shall have to consider the
conduct of this action as a whole.
And, of course, whilst I do not know what evidence
will be placed before me on the claimants' side, I am at
the moment in a state of complete ignorance as to what
advice may have been given at any stage, or what
constraints may have existed in relation to the
liquidators' course of action, and I am not going to
speculate on that for the moment, and I await to see
what, if anything, I am told about matters of that sort.
And in view of the fact that you propose to make
your application for costs on an indemnity basis, and to
support it in the manner in which you have described, it
would, I think, be unfortunate if I were to say anything
which might be regarded as prejudging the issues which
I shall have to determine.
I therefore propose to await developments in that
regard, and to see how matters develop.
I would just say this, that it has been a matter of
surprise to me for about a year now that the action was
being pursued, and it is also obvious, as you have
pointed out, Mr Stadlen, that there are lessons to be
learned from this trial. No doubt there are many
lessons to be learned, but there are certainly lessons
to be learned in terms of litigation which is pursued,
if it turns out to be the case that this litigation can
be so characterised, with a view to obtaining
a commercial settlement, rather than with a view to
obtaining a judgment on the merits as they might appear
to be.
But I do not propose to say any more about that for
the time being. I agree that it would be sensible that
we should meet next Friday, and subject to your being
told to the contrary or subject to any problem that may
arise, I suggest that we do set aside next Friday
morning to deal with that, at 10.30.
There are just one or two observations I would like
to make, not having had any opportunity to think about
it. The first observation I would like to make is that
it is obvious from what I have said already that to some
extent, there has already been a public exoneration of
the Bank's officials by the remarks that I have made to
Mr Cooke earlier, and the remarks I made earlier about
the extent to which those remarks obviously apply to
every other official of the Bank.
The second point I would just like to make is that
throughout this trial, I have received the most
extraordinary assistance from the legal teams involved,
and I say that without prejudice to any other
observations I may have to make, in particular the
claimants' solicitors have been remarkably helpful in
supplying me with the transcripts of the daily
proceedings at the various addresses which I have asked
them to supply me with those documents.
I would also like to pay tribute to the shorthand
writers, it should happens that today we do not have
present our usual team, I do not mean by that any
disrespect to the ladies who sit in front of me today,
who have done just as good a job as those who are more
usually in their seats, but it so happens that we have
been extraordinarily well served for a period of very
nearly two years on a daily basis by the same two
people, who have, in my view, performed quite
remarkably, and with a degree of professionalism which
leaves me in some awe as to their ability and their
dedication.
I would also just like to say publicly that I have
received the most enormous help and support from my
assistant, Mr Stephen Cromie. The trial of a long
action like this is potentially a somewhat lonely job,
and to have had the assistance of someone of Mr Cromie's
experience and insight has for me made the whole
experience somewhat more enjoyable than it might
otherwise have been, and I would wish to pay tribute
publicly, in case he is not here on a subsequent
occasion, to the enormous contribution he has made to my
ability to try this action.
I also wish to say publicly that in my judgment,
a huge contribution to this litigation has been made by
you, Mr Stadlen. You addressed me at enormous length on
the documents in this case, as a result of which I had
a far better understanding than I might otherwise have
had had I had to study those documents on my own.
Your address to me was a tour de force, if I may say
so, and no doubt it is something for which your clients
are deeply grateful, but I am deeply grateful to you for
your very grate assistance given to me throughout this
case (great ^).
Right, we shall meet then at 10.30 next Friday.
(12.00 pm)
(Hearing adjourned until 10.30 am
On Friday,