E&Y eyes Equitable for £1m costs

Link: Former Equitable directors fear costs

The firm was expected to chase for costs at the High Court last Friday, but the decision was deferred.

Legal experts said that this was because the appeal is only a matter of weeks away.

Insiders said the £1m costs could only grow, leading to fears that Equitable is risking the loss of vast amounts of money on a case that is becoming increasingly difficult for it to win.

But a spokesman for Equitable said it had made a ‘proven provision’ for legal costs in its accounts. He would not reveal how much this was, saying only that: ‘The society has fully provided for its litigation costs.’

Equitable launched a claim for damages against E&Y because the firm was its auditor at the time when a £1bn hole was found in the life assurer’s accounts.

Equitable rejected calls that continuing the case amounts to throwing good money after bad. ‘It is the board’s belief that we must proceed,’ he said. ‘Clearly we keep costs under review, but at the moment the board believes it has a strong and valid claim and it has a duty to act in the interests of members.’

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