BCCI LIQUIDATORS' £850m lawsuit against the Bank of England dramatically collapsed yesterday at the High Court in London bringing a 12-year legal battle to an end, according to this morning's papers.
The Bank immediately said it would seek indemnity costs of £70m from the collapsed company's creditors, who have themselves run up legal costs of £38m, reports the Daily Telegraph.
It makes the action, the first time the 331-year-old Bank has been sued, one of the most expensive in British legal history.
Gordon Pollock, QC for liquidators Deloitte & Touche, told the court yesterday that after seeking direction from the Chancellor of the High Court it was "no longer in the best interests of the creditors for the litigation to continue". It is thought the hearing was held at the request of the creditors committee.
As officers of the court, the liquidators had to seek the then Vice Chancellor of the High Court's approval to commence the action in 1993.
The Bank cannot be sued for negligence so the liquidators pursued a stronger claim, alleging misfeasance in public office - which required it to prove that bank officials were guilty of acting dishonestly or in bad faith. They claimed the Bank knowingly failed to protect depositors from the world's biggest bank fraud that led to the collapse of BCCI with debts of $16bn (£9bn). However, the Bank angrily denied this and only last month rebuffed a settlement approach.
TWO OF the world’s biggest reinsurance companies issued profits warnings yesterday after counting the cost of hurricanes Rita and Wilma, says The Times.
Swiss Re said that it would not meet its target of 10% earnings growth this year.
It expected claims for Rita and Wilma to reach $750m (£422m), bringing its total payouts for catastrophes this year to more than $3bn. Damage to offshore oil platforms meant that original estimates were too low, it said.
The two storms followed Hurricane Katrina, the costliest single-day event in insurance history, leading to an estimated $40-60bn in claims.
Hannover Re said that it would lower its 2005 net profit target when it announces its third-quarter earnings next week. “We are in the process of reviewing the exposure to all hurricanes,” a spokesman said.
RENEWED APPETITE for equity investment has boosted new business at Standard Life Investments (SLI) to record levels, but growth has still come in far below that of the industry overall, according to The Scotsman.
The Edinburgh-based fund manager unveiled its strongest ever three-month sales period for its mutual fund range: inflows surged 118.3% to £143.2m during the third quarter, from just £65.6m last year.
However, net retail sales of UK authorised investment funds have seen a five-fold increase during the three months to end-September, according to data from the Investment Management Association (IMA). Industry-wide, new business amounted to £2.468bn during the period - up a mammoth 480.7% on the £425m of money flooding into unit trust and open-ended investment companies (OEICs) in July, August and September last year.
SIR NICHOLAS STERN has been removed as second permanent secretary to the Treasury in the first significant reorganisation of the department under Nicholas Macpherson, its new permanent secretary, reports the Financial Times.
The former World Bank chief economist, who was brought in two years ago by Tony Blair as the government's adviser to improve economic policy advice to Gordon Brown, will now report to the prime minister as adviser on the economics of climate change and development. He will be a Cabinet Office official, but will still sit in the Treasury building.
His departure leaves the chancellor without a senior official or trusted adviser able to provide top-level independent economic advice.
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