IN Charles Dickens’ Bleak House, the protracted Jarndyce v Jarndyce inheritance court case sums up the complexities and often interminable nature of the British legal system.
The Chancery case drags on for so long that legal costs devour the entire estate.
“Jarndyce v Jarndyce drones on. This scarecrow of a suit has, in course of time, become so complicated that no man alive knows what it means.
“The parties to it understand it least, but it has been observed that no two Chancery lawyers can talk about it for five minutes without coming to a total disagreement as to all the premises.”
And later Dickens continues: “Jarndyce v Jarndyce still drags its dreary length before the court, perennially hopeless.”
It’s not quite there yet, and is certainly not pointless, but the Cattles saga shows some signs of becoming another Jarndyce v Jarndyce.
It has already consumed millions of pounds in legal tussles between various creditors.
In 2009 the company even took itself to court to determine whether banks or bondholders’ claims had priority if the business went bust.
That ended up in the Court of Appeal. In 2011, lengthy legal documents to support the money lender’s restructuring revealed lawyers and other advisers had netted at least £19.7m from the process. Shareholders labelled that “obscene”. That was two years ago.
Last year Cattles’ attempts to get hold of documents from its former auditor PricewaterhouseCoopers again ended up in the High Court as they argued over costs.
Even the judge, Mr Justice Eder, sounded bemused by the saga.
“These figures total an amount in excess of £250,000 which even today is a substantial amount of money for what was listed as a three-to-four hour hearing,” he said.
Meanwhile, a probe into Cattles by the accountancy watchdog, the AADB, is now into its fourth year.
The Financial Services Authority last year showed some gumption by fining and banning three former directors and publicly censuring Cattles. But Blackfriar struggles to believe those three were the only ones responsible for one of the biggest collapses in recent Yorkshire company history.
Now Cattles is taking PwC to court, alleging negligence over its audit in 2006 and 2007.
The company argues PwC missed crucial evidence which would have revealed it was not viable. PwC “vigorously” denies this.
They case is likely to arrive at the High Court late next year, and could last six to eight weeks.
The premise behind the Cattles legal action is not a flimsy one – bad debts were massaged in such a way that its re-stated accounts show losses of £97m for 2007, £765m for 2008 and £685m for 2009.
Thousands of staff lost their jobs; many thousands more former staff, whose pensions were comprised of shares, lost their nest eggs.
Finding out who is responsible is crucial, as is an explanation of how this went undiscovered for so long.
Blackfriar has asked, to little avail, what the latest legal challenge will cost. One thing is clear: the lawyers will do well out of it.
Engineer Redhall Group has had a torrid few years, beset by problems with long-held contracts.
The Wakefield-based group reported a £4.6m pre-tax loss in the 12 months to the end of September.
This was an improvement on the £8.1m pre-tax losses the prior year, but hardly a bonanza for shareholders.
Redhall is rebuilding itself after a series of troublesome contracts, most notably the Vivergo biofuel plant in East Yorkshire.
It went to the High Court over the disputed contract and expects a judgement in the coming months.
It also suffered production problems with a £20m contract to build doors for the Atomic Weapons Establishment (AWE).
The good news is it has reached a “satisfactory” agreement on a contract at Fellside Boiler Park at Sellafield.
Yesterday the group said its order book is at a record level at £140m and the new management team is making progress with sorting out the problem contracts.
In future, the group plans to shift its focus from contract work towards manufacturing, where margins are greater and risk lower.
Now looks like a good time to put a punt on Redhall’s shares, which have dropped from highs of 112.5p last March to lows of 50.5p last October.
They closed unchanged at 67p last night.
However investors would be wise to wait before piling in to find out just how much pain the High Court will inflict on the company when it makes its decision on the Vivergo contract in the next few months.