Thanks glo, but one more thing...
Issuing traffic information does not correct the clearance. Nor does ATC telling them what he expected them to do, by that time it was too late. The controllers failure to immediately correct the read back contributed directly to the event from a legal standpoint. The ability to hear or understand another aircraft's clearance is not a legal responsibly. Is it good practice? Of course, we all try to do that. However, we all know that isn't always possible in places like China, Russia, Italy, and France where they don't even speak English to all aircraft. Therefore, the argument that they were somehow liable because they may or may not have heard a clearance given to another aircraft just doesn't hold water.
The question here is legal liability. I'm not talking about procedures and common practice, only legal responsibly.