Arms-to-Iraq men to sue Customs

VICTIMS of at least two arms- to-Iraq cover-ups are seeking millions of pounds in damages in a series of court cases that could see Baroness Thatcher and a host of government ministers called to give evidence.

Lawyers have confirmed that they are preparing to sue HM Customs & Excise for malicious prosecution, and they are ready to stage a re-run of the devastating trial that exposed government connivance in the Matrix Churchill case.

Paul Henderson, Trevor Abraham and Peter Allen, the directors of Matrix Churchill, Reginald Dunk and fellow directors of Atlantic Commercial UK Ltd, and directors of two other firms who claim they were wrongly prosecuted, have instructed lawyers to prepare to sue Customs & Excise as soon as Lord Justice Scott's report into the scandal is published, probably early next year.

Lawrence Kormornick of Harris, Rosenblatt & Kramer, solicitors for Peter Allen, said: 'The whole can of worms will have to be reopened again, because malicious prosecution demands a high standard of proof. In order to prove that it was malicious, we will have to establish who knew what and when. If we have to, we will not hesitate to call all those involved, whether it's Lady Thatcher, Michael Heseltine, Alan Clark, the Customs officials involved or Sir Nicholas Lyell (the Attorney General).'

Mr Kormornick has been liaising with solicitors acting for the other victims to co-ordinate action, although it is likely that several cases will be brought, rather than a group action. In each case, damages running well into six figures will be demanded. He has been contacted by two other firms who felt they were wrongly prosecuted in the Eighties, but they will not be identified at this stage.

The Matrix Churchill case collapsed when it emerged that Paul Henderson had been working for MI6 while supplying machine tools to Iraq. Ministers had signed public interest immunity certificates, or gagging orders, preventing the release of government documents showing that they were aware of the Matrix Churchill exports and had condoned them, yet were prepared to see the company's directors face jail.

During the Scott inquiry, evidence emerged that the Government hushed up diplomats from the Middle East who could have proved that Atlantic Commercial UK Ltd did not know that a consignment of guns destined for Jordan would be diverted to Iraq.

Again, gagging orders had prevented the Government's role, described by Appeal Court judges as 'disgraceful', from coming to light. Mr Dunk and his two fellow directors had been fined pounds 27,500 and lost their business but their conviction was overturned in July. He, too, plans to sue Customs & Excise.

'We're going to get every penny we can,' he said. 'They knew I didn't know the weapons were going to Iraq and they approved an export to Jordan. But because of their connivance, I lost the consignment - pounds 100,000 - I had legal bills of at least pounds 60,000, my business collapsed, my reputation plummeted and I had to pay the fine.'

Sir Basil Rhodes, Mr Dunk's solicitor, said damages and compensation for his client could top pounds 1m.

Kevin Robinson of Irwin Mitchell, solicitors for Paul Henderson, managing director of Matrix Churchill, said he was waiting for the Scott report before making a decision on malicious prosecution. However, sources close to Mr Henderson said he would proceed.

'He lost more than most because he was within 24 hours of a management buy-out of the company when it was raided,' said the source. 'His backers pulled out and he lost a lot of money. He would have been the owner of Britain's largest machine-tool company; instead, he was facing jail. He would certainly be looking for damages in excess of pounds 1m.'

Nick Devine of Blythe Liggins, who is acting for Trevor Abraham, confirmed that his client was also planning a malicious prosecution suit running well into six figures.

Customs & Excise refused to comment.