No claim too huge for striking

If ever a case served as an argument for the profession to always carry out a full investigation into the possibility of successful striking out moves, it is the recent one involving top accountants Ernst & Young and BCCI.

A massive $3.5bn (£2.2bn) claim against Ernst & Young by BCCI's liquidators has been more than halved in what is believed to be the largest claim ever to be struck out at the High Court.

The claim against Ernst & Whinney, Ernst & Young's predecessors, which was originally for $8bn, but which was reduced by agreement to $3.5bn prior to earlier striking out moves in 1995, was cut by Mr Justice Laddie by $1.8bn. The claim was branded by the judge as "long on assertion and deficient on relevant facts".

Victoria Cochrane, last year's winner of The Lawyer's In-house Lawyer of the Year Award and head of Ernst & Young's legal group, believes it emphasises the wisdom of examining all litigation closely, whatever its magnitude, to investigate the possibility of striking-out claims.

She says that, in the past, there has been a feeling within the profession that judges are reluctant to strike out huge claims, preferring to let such cases run their course, with the final outcome decided on the basis of a fully-contested hearing of all the facts.

But now Cochrane feels that this case must add a new dimension to the effectiveness of striking out applications.

"We were extremely pleased that, despite the size of the claim, the judge felt able to grasp the nettle and deal with the matter positively on a strike out application, rather than insisting the whole claim should go to full trial," she says.

"Judges have been inclined to say that the court must look at all the facts of a claim of this nature rather than dealing with it on the legal issues.

"Now we have seen a striking out on such a large scale, however, I think it is bound to make those handling other massive claims look again and consider whether there is scope to seek to have the claims either struck out in their entirety or at least in part."

While Cochrane played a major role in master-minding the strike out moves, she also stresses the vital role played by Linklaters & Paines.

Ernst & Young has a compact in-house legal department of six lawyers to handle a large work load. But Cochrane considers that, when a case like this emerges, "outside muscle and expertise" is vital.

It was the first time the firm had called on Linklaters as outside advisers, and Cochrane has nothing but praise for the role they played in what her partners at Ernst & Young are flagging as a "strike out coup".

She also pays tribute to Christopher Clarke QC, who appeared for Ernst & Young during the week-long striking out hearing and worked closely on the case before it reached court.

Cochrane also highlights another point brought out in the case. She says it has long been one of her own hobby horses that pleadings have become "too long and waffly".

"Sometimes mammoth statements of claim have been produced almost in the hope that they will intimidate the other side into settling," she says.

"There is a need for them to be made as clear and succinct as possible whatever the size and subject matter of a case and I feel this was another message brought home by the judge in this action."