THE Bank of Bermuda has failed to pay a customer hundreds of thousands of dollars in legal costs following a lengthy court battle. And businessman Harold Darrell also claims the bank charged him a whopping 37.23 per cent interest on various loans in an attempt to bankrupt him.

Mr. Darrell has alleged his discrimination case against the bank is part of a wider conspiracy, involving Government Ministers.

The latest allegation, that the bank has failed to pay more than $650,000 in legal fees, stems from a drawn-out dispute between the two parties which began in October 2000 when Mr. Darrell accused the bank of breaching client confidentiality.

He alleged that a potential business deal turned sour after a bank employee leaked information about his personal account to the party he was negotiating with. The entrepreneur also submitted a complaint to the Human Rights Commission (HRC) alleging he was the victim of discrimination.

The bank fought to have Mr. Darrell’s Human Rights complaint thrown out — a request that was rejected by the Supreme Court in August 2004. A subsequent appeal was rejected in June 2005 and the bank was ordered to pay Mr. Darrell’s full legal costs.

Mr. Darrell was represented by Delroy Duncan of law firm Trott and Duncan throughout the hearings. The firm in turn recruited top QC Cherie Booth — wife of former British Prime Minister Tony Blair — to help win the case.

As a result, Mr. Darrell totted up a legal bill of more than $650,000, with approximately $175,000 owed to Ms Booth.

Two years later, Mr. Darrell has yet to paid and now claims that the bank conspired to put him out of business.

He claims that, shortly after the costs were awarded, the bank’s CEO, Philip Butterfield, met with Mr. Duncan and his partner, Perry Trott. As a result, it is understood the law firm was taken on by th bank. Mr. Duncan then said he was no longer able to represent Mr. Darrell and asked him to hire another lawyer in order to get the bank to pay his legal costs paid.

Mr. Darrell claims he refused to do this — and deliberately withheld payment to Cherie Booth in a bid to force Trott and Duncan to pursue the bank for his costs.

However, the law firm instead paid Ms Booth’s bill with a Bank of Bermuda cheque, writing off her fee rather than confronting the bank over Mr. Darrell’s unpaid legal costs.

Mr. Darrell also questioned how a debt of around $422,000 that he owed the bank in 1995 through an arranged loan mushroomed to $1.3 million. Accountants consulted by Mr. Darrell’s current lawyer deduced that the businessman was being charged as much as 37.23 per cent interest on the loan — five times higher than the going rate of seven per cent.

This week the bank’s lawyer, Jeffrey Elkinson, dismissed the claims, arguing that it was Mr. Darrell’s responsibility to invoice the bank for costs. No payment could be made until a bill had been received, Mr. Elkinson said.

He acknowledged that Mr. Duncan is employed by the bank for occasional conveyancing work, but that did not prevent Mr. Darrell from billing the bank. He said that, because there are established rates for legal services, any lawyer could go through Mr. Darrell’s file and calculate an accurate bill.

But yesterday Mr. Darrell hit back, insisting that one law firm could not submit a bill of costs for work carried out by another law firm, according to official instructions.

He produced a letter from the Court of Appeal Registrar informing his lawyers “that you may file a Cost bill in respect of that which is owed to you and not what is owed to another firm”, which contradicts Mr. Elkinson’s claim.

Mr. Elkinson also explained that, because Trott and Duncan had recruited Ms Booth, the law firm had no option but to pay her expenses.

And he denied that Mr. Darrell had been charged exorbitant interest rates, claiming that the reason the businessman’s debts ballooned was because of certain financial penalties. Mr. Darrell’s lawyers maintain that he owes the bank around $625,000 — $25,000 less than the bank owes Mr. Darrell in legal costs.