Tort

Depositors with failed bank claiming damages from banking regulatory body for alleged misfeasance in public office and breach of directive rights - reckless indifference to illegality and injury sufficient for misfeasance - directive giving depositors no rights against regulatory body under community lawThree Rivers District Council and Others v Governor and Company of the Bank of England: HL (Lord Steyn, Lord Hope of Craighead, Lord Hutton, Lord Hobhouse of Woodborough and Lord Millett): 18 May 2000

The plaintiffs were all creditors of BCCI, a failed bank, who claimed that the defendant, the Bank of England, was liable for misfeasance in public office or, alternatively, under the First Council Banking Co-ordination Directive (77/780/EEC) for failing adequately to supervise BCCI.

Clarke J made rulings, as preliminary issues, on the scope of the tort and the effect of the Directive, and subsequently struck out the claims as unarguable.

The Court of Appeal [2000] 2 WLR 15 upheld his rulings and the decision to strike out the claims.

The plaintiffs appealed; the defendant cross-appealed.

The first appeal to be heard challenged the rulings on the preliminary issues.Lord Neill of Bladen QC, David Vaughan QC, Richard Sheldon QC, Robin Dicker and Dominic Dowley (instructed by Lovells) for the plaintiffs.

Nicholas Stadlen QC, Paul Lasok QC, Mark Phillips QC, David Anderson QC, Rhodri Thompson, Bankim Thanki and Ben Valentin (instructed by Freshfields) for the defendant.Held, dismissing the appeal the appeal in part and referring the remaining matters for further argument, (1) that, in addition to arising when a public officer exercised his power specifically intending to injure the plaintiff, the tort of misfeasance in public office arose when a public officer acted in the knowledge of, or with reckless indifference to, the illegality of his act and in the knowledge of, or with reckless indifference to, the probability of causing injury to the plaintiff or person of a class of which the plaintiff was a member; (2) that, read as a whole, the Directive placed duties of co-operation on the supervisory authorities of member states but stopped short of prescribing any duties of supervision; and that, consequently, it was not possible to discover provisions entailing the granting of rights to individuals as such rights were not necessary to achieve the results which were intended to be achieved by the Directive.

(WLR)