THE BCCI liquidators’ action against the Bank of England will go down as the most expensive litigation in legal history.

This modern-day equivalent of Jarndyce v Jarndyce has run for 12 years. It involved a claim of £850 million and legal costs estimated at £120 million.

Gordon Pollock, QC, for the liquidators, made an opening speech that lasted 79 days, the longest opening of a case in the history of the English courts.

Then Nicholas Stadlen, QC, for the Bank of England, topped that with an opening speech running to 119 days. Yesterday accusations flew from both sides as to the cause of the lengthy delays and resulting huge costs — twin evils of civil litigation that the Woolf reforms of five years ago were meant to eliminate.

The Bank blamed the liquidators for bringing what they called a “hopeless case”. Mervyn King, the Governor of the Bank, said there was never “a shred of evidence” to support the allegations.

The liquidators also went on the offensive, accusing the Bank of spending excessive sums in its defence, which in turn forced the liquidators to run up costs, although their own fees, they say, were half those of the Bank. In a statement, they blamed the Bank for causing delays by resisting the disclosure of documents and employing other “tactics”, which had to be contested in additional legal proceedings.

The statement said: “The Bank’s attacks on the claim prior to the liquidators’ successful appeal to the House of Lords in March 2001 added an extra five years to the case.”

Other commentators raised a question over the conduct of the trial, saying that the proceedings could have been better managed. The recent Equitable Life litigation was being held up, in contrast, as a well-run trial.

Clare Canning, head of commercial litigation at Barlow Lyde & Gilbert, who successfully defended Ernst & Young in a £2.7 billion action brought by Equitable Life, said: “The collapse of this case highlights the pressures on liquidators and their advisers . . . they apparently feel obliged to bring claims irrespective of the common-sense view of the likely return to creditors. Just what pressures are they under?”

Meanwhile, like Jarndyce v Jarndyce, the litigation is not yet over. Mr Justice Tomlinson was told yesterday that the Bank of England would be claiming at least £70 million costs against the liquidators.The legal gravy train is set to run and run.

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