Linklaters has won a round for client Ernst & Young in its battle with the BCCI liquidator, Deloitte & Touche which is being represented by Lovell White Durrant following Mr Justice Laddie's strike-out of $800m from a $3.4bn negligence claim.
Judge Laddie struck out another $1.8bn of the claim last year, but it was reinstated by the Court of Appeal only last month.
The latest strike-out of $800m relates to money lost at BCCI parent company BCCI Holdings.
Judge Laddie accepted Ernst &Young's arguments that, since it had resigned as auditor to Holdings in 1986, it could have no responsibility for the money it lost around 1990 and 1991.
Judge Laddie said that in huge, complicated claims, obviously weak parts of them should be struck out or else they would put “very great pressure” on the defendants to settle.
Linklaters partner John Turnball said Judge Laddie was effectively saying that plaintiffs should not be able to “blackmail” the defendant into coming up with a settlement offer by making huge claims.
He said the judge appeared to be sending a message to the Appeal Court over its reinstatement of the $1.8bn claim against Ernst & Young.
Linklaters is waiting to hear whether the House of Lords will grant it leave to appeal the $1.8bn reinstatement decision which relates to BCCI Overseas.
Lovell White Durrant's Russell Sleigh said Judge Laddie had granted Deloitte & Touche leave to appeal the most recent strike-out and it would do so.
He said: “The argument that you have no responsibility for anything which occurs after someone else becomes an auditor is highly debatable.”
Counsel John Powell QC and Adrian Beltrami were instructed by Lovells, while Linklaters used Christopher Clarke QC, Iain Milligan QC and Christopher Hancock.
Ernst & Young still has a claim of $800m against it for its audit of BCCI SA, a Luxembourg incorporated subsidiary.