The British legal system is "incapable" of guaranteeing a simple and speedy solution to commercial disputes, the Governor of the Bank of England has said.
In a vitriolic attack on the handling of the legal battle against the Bank by liquidators of the failed bank BCCI, Mervyn King said yesterday the "arcane" process had allowed lawyers to earn "vast fees". The Bank was awarded legal costs of £73m this month after liquidators for the rogue bank dropped their claim that the Bank committed "misfeasance in public office" in the way it regulated BCCI.
At the annual Mansion House dinner in the City of London last night, Mr King described the case as the "most expensive fishing expedition in history", which those who brought the case described as a "blood sport". He added: "A legal framework for enforcing contracts and resolving disputes is not just an arcane process which allows professionals to earn vast fees, but an integral part of the infrastructure of guaranteeing that."
His remarks are the latest sign of the anger felt within the Bank that the liquidators' claim for £850m compensation had been allowed to proceed through the courts for 13 years.