[2025] UKUT 00185 (TCC)

Mr Arden provided two witness statements, was cross-examined by Mr Stanley, re-examined by Mr Jaffey and answered questions from the Tribunal. He was often reluctant to give straightforward answers on key evidential points. For example, a paper circulated before a meeting on 22 October 2018 stated that £574m of commercial mortgages had been incorrectly risk-weighted at 50% instead of 100%. Three other attendees at the same meeting confirmed that there had been no dissent from that proposition, but when Mr Arden was asked the same question three times in succession, he failed to answer. The dialogue went as follows:

“Mr Stanley: There was no suggestion at this meeting of any dissent
from the decision to reclassify risk-weighted assets, was there?

Mr Arden: There was no decision to reclassify the assets at this stage…the committee explicitly didn't approve the paper. It noted the paper.

Mr Stanley: Yes, it noted the paper, but nobody suggested that that reclassification shouldn't happen, did they?

Mr Arden: No, because I knew that Deloitte were coming in at that stage.

Mr Stanley: Nobody suggested that there was any error - that there hadn't been an error in relation to how the assets were classified.

Mr Arden: At this stage I was waiting for Deloittes to come in.”

To give another example out of many, the exchange about Mr Arden’s understanding of the RWA position went as follows:

“Mr Stanley: Did you think you had any idea what the bank's risk-weighted assets actually were at 30 September 2018?

Mr Arden: That's a good question. We were carefully considering and doing work at pace to understand what the exact bank's RWAs were [sic].

Mr Stanley: Does that mean you didn't actually know what they were?

Mr Arden: As you know, we were doing work to get to the bottom of the issues that we were facing.”

The overall focus of Mr Arden’s written and oral evidence was to support his case rather than to describe events in a straightforward manner. For example, it was a key part of his case that he did not know there was a material error in the Q3 Update figures until January 2019. Mr Arden said:

As is clear from our findings in the main body of this decision, none of those statements was correct. At the time of the Q3 Update:

In oral evidence, Mr Arden went beyond the matters set out in his witness statement. He stated that he doubted the Bank’s financial data generally, saying “I'm not sure at this stage that I believed anything that was being presented to me”; and “I didn't quite believe anything that the internal team were telling me”. Mr Stanley described these statements as “hyperbolic”, submitting that they did not reflect Mr Arden’s position at the time, and in any event did not help his case. We agree, see §§373-375.

For all those reasons, we did not accept some of Mr Arden’s evidence. However, we also find that he was not deliberately attempting to mislead the Tribunal. Following the events in question, he had been required repeatedly to justify and explain what happened, and as Leggatt J said in Gestmin, his memory had been “revised” to make it “more consistent” with his present beliefs, rather than reflecting the position at the time. The reason he was reluctant to give straightforward answers when cross-examined was because he was being forced to confront contemporaneous evidence which was inconsistent with his memory (as revised), not because he was being obstructive.