Who's suing who

BCCI liquidators won the right yesterday to sue Ernst & Young for pounds 1.1bn over the audit of the crashed bank just as Ernst & Young pulled out of merger talks with fellow accountancy giant KPMG, three Law Lords in the Court of Appeal unanimously overturned an order made in January 1997 which struck out claims brought by the liquidators of BCCI, Deloitte & Touche.

Mr Justice Laddie struck out the claims bought on behalf of BCCI (Overseas), a Cayman Islands registered subsidiary, against Ernst & Whinney, a firm which later became Ernst & Young. BCCI was closed by regulators in 1991 after massive long-term frauds were discovered, leaving the bank with debts of more than $10 bn.

Chris Morris, lead liquidator, said yesterday: "We consider this judgment a very satisfactory result for the creditors of BCCI. We thought that the original Order was mistaken and we are pleased that the position taken by the liquidators has been vindicated."

Nick Land, senior partner at Ernst & Young, commented: "I am dissappointed that the Court of Appeal have overturned Mr Justice Laddie's original ruling, but the Court have not found that a duty of care was owed by Ernst & Whinney to BCCI (Overseas) and I am confident that this claim will fail when the facts are fully examined at trial."

Mr Morris is also suing Price Waterhouse, the auditors to other parts of BCCI. The claims against the two accountancy firms amount to more than pounds 1.8bn.

The liquidators are also suing the Bank of England in its role as co- regulator of BCCI. They lost the first round in court, but intend to pursue an appeal in May or June. Mr Morris's lead counsel for the case will be Lord Neill, a former master of All Souls College, Oxford, and chairman of the new committee on standards in public life.

Mr Morris is set to make a second payment to BCCI's thousands of creditors this June. The liquidators have already paid out over pounds 1 billion to former customers, and the next payment could equal that. All told they have raised around pounds 1.8bn, having incurred costs of over pounds 130m in the process, much of that in legal fees.

It's a busy time for insolvency practitioners, despite the bouyant economic conditions in the UK. Yesterday the courts appointed a third liquidator to Mr Morris's team, because he and Steve Akers are so busy on other cases.

The Deloitte partner Ralph Priest is the new man. One of his recent jobs was receiver to West Heath, the old school of Diana, Princess of Wales, on behalf of the Charity Committee. Mr Priest put the school on the market yesterday, in Country Life magazine.

Richard Branson's Virgin group is seeking an injunction to prevent an escort agency launched in London a year ago called "Virgin Escorts" from using the Virgin name. Virgin Escorts was registered as a company in High Holborn, London, in February 1997 by Robert Brown of Kingston Upon Thames, Surrey, and Michael Brown of Inverness Terrace, London.

The writ lodged in the High Court last week says that "the Virgin name is one of the best known brand names in international business". Use of the Virgin name by the escort agency would "infringe the plaintiff's registered trademarks ... and the use of the sign would take unfair advantage of and would be detrimental to the distinctive character and repute of the plaintiff's Virgin mark".

The escort and dating agency was also guilty of "passing off" its services as those of Mr Branson's companies, the writ said. The plaintiffs said that, prior to the issue of the writ, the defendants refused to undertake not to continue using the name. The writ demands that the defendants stop using the Virgin name or anything like it, and claims damages of up to pounds 10,000.

More Lloyd's names are preparing to follow the 66 who launched legal action last week against Norwich Union Life Insurance, over guarantees the company sold to names in the 1980s. The 66 who have served a writ on the Norwich, represented by solicitors Harkavys, belong to a 200-strong action group, and more of the group are now expected to go to law. The case centres around guarantees, linked to life assurance policies, that Norwich provided to names for their use in the Lloyd's market, just as giant asbestos claims and "spiral re-insurance" were to push the market to the point of bankruptcy.

No figures are mentioned in the writ, but some sources speculate each name is seeking to escape debts on average of around pounds 100,000. The names are claiming that since Norwich had two subsidiaries involved in the Lloyd's market, Norwich Winterthur Reinsurance and Stronghold Insurance, the respective heads of those businesses should have known about the likely problems in the Lloyd's market. The executives named in the writ are Michael Falcon, chairman of both NU Life and Norwich Winterthur, and Allen Bridgewater, chief executive of NU Life and also a director of the two Lloyd's businesses.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
Buddy DeFranco
people
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
filmIdris Elba responds to James Bond rumours on Twitter
Arts and Entertainment
Lena Headey as Cersei Lannister in Game of Thrones
film
News
i100
Sport
Yaya Sanogo, Mats Hummels, Troy Deeney and Adnan Januzaj
footballMost Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

A timely reminder of the bloody anniversary we all forgot

A timely reminder of the bloody anniversary we all forgot

Who remembers that this week we enter the 150th anniversary year of the end of the American Civil War, asks Robert Fisk
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing

Scarred by the bell

The downfall of the TV star charged with bar stabbing
Why 2014 was a year of technological let-downs

Why 2014 was a year of technological let-downs

Security breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Cuba's golf revolution: But will the revolutionary nation take 'bourgeois' game to its heart?

Will revolutionary Cuba take 'bourgeois' golf to its heart?

Fidel Castro ridiculed the game – but now investment in leisure resort projects is welcome
Ed Richards: Parting view of Ofcom chief. . . we hate jokes on the disabled

Ed Richards: Parting view of Ofcom chief. . . we hate jokes on the disabled

Bad language once got TV viewers irate, inciting calls to broadcasting switchboards. But now there is a worse offender, says retiring head of the media watchdog
War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?
Finally, a diet that works: Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced

Finally, a diet that works

Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced
Say it with... lyrics: The power of song was never greater, according to our internet searches

Say it with... lyrics

The power of song was never greater, according to our internet searches
Professor Danielle George: On a mission to bring back the art of 'thinkering'

The joys of 'thinkering'

Professor Danielle George on why we have to nurture tomorrow's scientists today
Monique Roffey: The author on father figures, the nation's narcissism and New Year reflections

Monique Roffey interview

The author on father figures, the nation's narcissism and New Year reflections
Introducing my anti-heroes of 2014

Introducing my anti-heroes of 2014

Their outrageousness and originality makes the world a bit more interesting, says Ellen E Jones