Barclays will have to shoulder the £33.6m costs of successfully defending a High Court lawsuit brought by Amanda Staveley’s PCP over its 2008 Qatar fundraising in which the bank was found to be “guilty of serious deceit”.
The ruling by the High Court on Thursday followed a tussle between the lender and the investment firm over legal costs.
The huge bills faced by Barclays and PCP were disclosed to a hearing on Thursday, confirming the case as one of the most costly legal disputes in recent years. PCP incurred £19.5m of legal costs.
A five-month High Court trial last year centred around events during the 2008 financial crisis when Barclays tapped Middle Eastern investors in Qatar and Abu Dhabi for billions of pounds to stay afloat.
Staveley’s PCP, which had been involved in attempts to put together an investment in Barclays with Abu Dhabi royal Sheikh Mansour, had alleged deceit by Barclays after it emerged that Qatar had been offered a different deal than Abu Dhabi.
Mr Justice David Waksman ruled in favour of Barclays last month saying PCP had not proved it would have obtained debt finance to do a deal — but he found the bank had made false misrepresentations to Staveley’s PCP.
Under the High Court’s “loser pays” rule, the defeated party in a legal case pays most of the winner’s legal bills. The ruling had left PCP and Therium, a litigation funder which backed PCP in bringing the case, potentially on the hook for paying part of Barclays’ legal bill.
However Waksman ruled on Thursday that each side should bear their own legal costs after hearing PCP’s arguments that the usual cost rules should not apply because Barclays had been found to be guilty of deceit.
Waksman said in order to do justice to the case, PCP should not pay any costs to Barclays given that the bank had obtained a “financial benefit as a result of its fraud.”
Joe Smouha QC, acting for PCP, told the High Court: “PCP has succeeded in establishing every building block of its case including the most important block of a fraud case — except one.” He claimed that Barclays had benefited from its “very successful fraud” and so should shoulder some of the legal costs.
In his written arguments, Smouha claimed that the huge legal bills had been aggravated by Barclays’ approach of “admitting nothing and denying everything” and using its “unlimited resources” and “deep pockets” to cause as much financial damage to PCP and Staveley as it could by dragging out the litigation.
Barclays had claimed that PCP as the losing party should pay £16.75m towards its legal bills. David Quest QC, representing Barclays, said PCP’s case was “fundamentally flawed and ought to have been abandoned”. He told the court that it was “completely without foundation” to suggest that Barclays had dragged out the lawsuit.
Waksman refused PCP permission to appeal against his ruling but PCP can still petition the Court of Appeal separately to hear the case.