Bank of Credit and Commerce International v Ali and others
| DOI | http://doi.org/10.1111/1468-2230.00387 |
| Published date | 01 May 2002 |
| Author | Kay Wheat |
| Date | 01 May 2002 |
CASES
Bank of Credit and Commerce International vAli
and others
Kay Wheat*
Introduction
Whatever the eventual outcome of the various pieces of litigation spawned by the
collapse of the Bank of Credit and Commerce International (BCCI), there is no
doubt that it has been lucrative for lawyers.1In BCCI vAli and others2we have
now had a second airing in the House of Lords of the ‘stigma claims’ arising out of
the former bank employees’ allegations that they have been unable to find work
because of the tarnished reputation of their former employer.
A number of employees had been selected in this test case, although, in the
event, it only concerned one plaintiff, a Mr Naeem. He was employed by the bank
in the UK from June 1985 until June 1990, when he was made redundant. A
‘redundancy package’ was agreed in the sum of £9,910.79, and a document, known
as a COT-3, was drawn up by the Advisory, Conciliation and Arbitration Service
(ACAS) and agreed by Mr Naeem and the bank’s representative. The COT-3 is a
widely used form when actions are brought to claim statutory rights before
employment tribunals, but they are also used when there are settlements via the
mediation of an ACAS official, and are frequently drawn up to include settlements
of non-statutory claims. The COT-3 is essentially a release. In this case the
wording was:
The Applicant [Mr Naeem] agrees to accept the terms set out in the documents attached in
full and final settlement of all or any claims whether under statute, Common Law or in
Equity of whatsoever nature that exist or may exist (emphasis added) and, in particular, all or
any claims rights or applications of whatsoever nature that the Applicant has or may have or
has made or could make in or to the Industrial Tribunal, except the Applicant’s rights under
the Respondent’s [the bank’s] pension scheme.
Of the £9,910.79, £2,772.50 was paid in consideration of Mr Naeem signing the
form of release. Around 900 employees were made redundant under the same
circumstances; BCCI, therefore, paid in total approximately £2.5m for the releases.
It subsequently became known that the bank was insolvent and had carried on its
business in a corrupt and dishonest manner. The bank is now in liquidation. In
ßThe Modern Law Review Limited 2002 (MLR 65:3, May). Published by Blackwell Publishers,
108 Cowley Road, Oxford OX4 1JF and 350 Main Street, Malden, MA 02148, USA. 425
* BA, Solicitor, Senior Lecturer in Law, Nottingham Trent University. Thanks to an anonymous referee
for comments on the previous draft.
1 See Malik vBCCI SA (in liquidation) [1998] AC 20 (see below),and subsequent litigation, eg BCCI
SA (in liquidation) v(1)Ali (2) Khan & Ors (No 6) [2001] EWCA Civ 636 (the Court of Appeal gave
permission to appeal the decision of Lightman J who had dismissed claims against BCCI on the
ground that they had failed to prove actual rather than hypothetical loss. It was held that there was a
real prospect of establishing that this test was incorrect); Three Rivers District Council vGovernor of
the Bank of England (No 3) [2000] 2 WLR 1220 (failed action alleging malfeasance in public office
against the Bank of England in its regulation of BCCI).
2 [2001] 1 All ER 961.
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