Equitable Life has dropped its 700m High Court claim against its former auditor Ernst & Young and faces a 30m legal bill.In what E&Y barrister Mark Hapgood called “the biggest climbdown in English legal history”, Equitable dropped its claim – originally for 2.6bn – after the evidence of former directors blew the society’s case out of the water. Equitable chairman Vanni Treves says he offered to resign but neither he nor any the board executives’ heads will roll and Treves insists the firm did not “cave in” but was avoiding the risk of being saddled with E&Y’s 25m-30m legal costs. E&Y says it did not push for costs because it wants to draw a line under the case and says its reputation is intact. The claim, which cost Equitable policyholders 30m, fell apart when Equitable’s legal team realised it had little chance of proving the former directors would have taken preventive action if the audit had been accurate – a key strand of its case. Equitable is continuing its 1.7bn action against 15 former directors. It will continue to use lawyers Herbert Smith for this action and Treves says Equitable will not sue the firm for giving the legal advice in the E&Y case. E&Y and Equitable were unable to agree on how the costs were settled. E&Y says Equitable made a token payment of 795,000 towards its 25m-30m legal bill while Equitable says this was merely money refunded to E&Y which it had received from the accountant for its costs earlier. Treves says: “If we had lost, we would have had to pay E&Y’s legal costs which would have been up to another 30m. The evidence from the former directors was not something that we believed we would receive. The litigation was very risky but we had no choice.” Hapgood says: “This very long, costly, utterly pointless litigation has culminated in the biggest climbdown in legal history. There is a salutary lesson to be learned for those thinking of suing auditors and it is simply this – bringing a hugely inflated claim for blood- curdlingly amounts of money in the hope that the sheer scale of the claim will force the defendant in making a substantial cash payment is misconceived.”
Clerical Medical has increased the number of funds available on its group pension range by over a third, adding portfolios from Fidelity and Invesco Perpetual for the first time.
New Star head of fund of funds Mark Harris is to launch a global cautious portfolio in October in response to growing demand.The fund will be Harris’ first fund of funds launch since 2000 and will invest 40 per cent in fixed interest for income and to reduce volatility. Harris describes the fund’s property and […]
Zurich International Life has added 37 new funds to its international proposition to be available from October 3, 2005.ZIL will now deliver access to a range of asset classes, industry sectors and currencies.Ten funds have been added to the mirror fund range, accessed through the ZIL vista and magnus products, while 27 funds now complement […]
John Charcol managing director Ray Boulger says the buy-to-let market will, undoubtedly be boosted after A-Day but the real question is by how much.
In this short video, Trevor Greetham, head of multi asset at Royal London Asset Management, discusses the role of diversification in multi asset portfolios today. Watch the video in full The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get […]
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