In:
Journal of Financial Regulation and Compliance, Emerald, Vol. 9, No. 3 ( 2001-3-1), p. 279-283
Abstract:
The various pre‐trial stages of these complex proceedings have been discussed in previous issues of this Journal in Vol. 5, No. 1, pp. 70–72, Vol. 7, No. 3, pp. 274–280, Vol. 8, No. 4, pp. 359–364 and the factual background explained. Depositors in the UK branch of BCCISA (part of the Bank of Credit and Commerce International group which collapsed in 1991 leaving large scale losses) had brought actions for damages in respect of their uncompensated losses against the Bank of England (the Bank) in relation to its discharge of its statutory functions under the Banking Act 1979. They argued (1) that the Bank's licensing as a deposit‐taker and subsequent supervision of BCCI amounted to misfeasance in public office and/or (2) that they had, under European law, enforceable rights against the Bank conferred on them by the First Council Banking Co‐ordination Directive (77/780/EEC) which the Banking Act 1979 implemented in the UK. In May, 2000 the House of Lords definitively settled as a matter of law the second ground of the claimants' argument ruling that the European Directive in question did not have the effect of conferring rights in damages against the Bank on the depositors. In the same judgment the House of Lords ruled as a matter of law that the essential elements of the tort of misfeasance in public office (which by this stage is the only possible legal ground of claim available to the depositors) were to be found ‘where a public officer acts knowing that he has no power to do the act complained of and that the act will probably injure the [claimant]. It involves bad faith inasmuch as that the public office r did not have an honest belief that his act was lawful’ (per Lord Steyn, House of Lords judgment of 18th May, 2000 in these proceedings). This ‘reckless indifference’ which must be proven to exist for a claim against the Bank to succeed must be judged in a subjective sense, their Lordships ruled last year, so that the depositor claimants needed to show knowledge on the part of the Bank that the decision of the Bank would probably damage the Appellants. The question of whether or not the facts pleaded by the claimants reveal a sustainable cause of action against the Bank or whether, as the Bank had argued throughout, they did not and the action ought to be struck out without proceeding to full trial was referred to another House of Lords hearing. It was from that subsequent hearing on whether or not the claim should be allowed to proceed to full trial of the substantive issue of the Bank of England's alleged liability that this decision was made.
Type of Medium:
Online Resource
ISSN:
1358-1988
Language:
English
Publisher:
Emerald
Publication Date:
2001
detail.hit.zdb_id:
2093796-9
SSG:
2
SSG:
3,2
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