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Court hands down judgment on discontinued case

United Kingdom
13/04/2006
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An unusual court ruling handed down on 12 April 2006 has cast a new light on what the worst outcome can be when you begin litigation. Once litigation is started, it will not be in your sole control to finish it by merely discontinuing the action and paying the costs of the other side.

For the first time, the court has given judgment even though the trial had not run its full course. Litigants should be aware that this may give rise to results they had not previously anticipated, particularly if their case raises issues of reputational risk.

In this case, the liquidators of BCCI had already discontinued the 256-day trial against the Bank of England and agreed to pay the Bank’s legal costs on an indemnity basis (the highest level available). A claimant might have been forgiven for believing that this was the worst outcome it could achieve. However, the liquidators had made serious allegations of dishonesty against 42 senior officials of the Bank but did not apologise or withdraw their allegations. The allegations had been so serious that the Bank asked the court to explain in a formal ruling why it was entitled to costs on an indemnity basis.

The court went into detail in criticising the legal case and the way the litigation had been conducted and ruled that the grave allegations made against 42 named officials of the Bank were unfounded.

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