The legal bill facing AIB in its pursuit of the world’s largest banks for allegedly assisting rogue trader John Rusnak is escalating into Ireland’s costliest litigation, as the dispute in the New York courts stretches into its eighth year, the Sunday Tribune has learned.

AIB sued Citibank and Bank of America for $480m of the $691m in losses, alleging that the Wall Street giants knew about Rusnak’s currency trades long before his detection in 2002. The case, launched in 2003, is also heading to be the costliest for AIB, now all but fully-owned by taxpayers.

Documents filed in recent weeks to Manhattan’s Pearl Street court, which handles the largest Wall Street cases and the costliest corporate lawsuits in the world, show that the dispute, which after over seven years is still at the legal discovery stage, has already generated four million pages of documents, testimony, correspondence, emails, hand written notes, sworn depositions taken from scores of witnesses around the world and involves some of the most expensive law firms in the world.

Citi and Bank of America, which counter-sued AIB, appears to have reversed an early legal success by AIB’s New York counsel in 2006 by prising all but a remaining handful of disputed documents from AIB, the recently-filed court records reveal. The documents, including 1,533 meticulously-itemised records, include written correspondence involving former AIB chief executive Michael Buckley; emails from Colm Doherty, then head of AIB’s capital markets division, and Gary Kennedy, AIB’s former finance chief who is now a non-executive director at Anglo Irish. Many documents remain edited to preserve client-attorney privilege.

Leading corporate barristers in Ireland say it is almost impossible to quantify the ongoing legal expenses because corporate litigation in New York costs many multiples of pursuing action in Dublin. But they say that the costs will be the highest in the world.

The documents show that Citi and Bank of America continue to defend the lawsuit relentlessly. Citi has some of the world’s costliest lawyers from Cleary Gottlieb Steen and Hamilton, while AIB has its long-standing American high-profile law firm Cooley Godward Kronish.

In a 2006 press release, Cooley said AIB planned “to prosecute the case vigorously”.

An AIB spokesman said the bank did not break out the costs of its litigation.