As many as 10 accountants from three of the Big Four accountancy firms are expected to take the stand as part of Equitable Life’s case against E&Y at the High Court.
The case, which kicked off this week with Equitable outlining its claim, is set to run until December.
As part of the trial, E&Y’s six audit partners responsible for Equitable are to be cross-examined in May, according to the current timetable.
Four expert witnesses from PwC and KPMG are also expected to appear, the former on behalf of Equitable and the latter on E&Y’s side.
Their presence is required to answer crucial questions, including whether E&Y was negligent in its audit capacity in not alerting Equitable to guaranteed annuity rate (GAR) liabilities.
E&Y rejects the idea that it was negligent in its outline case, seen by Accountancy Age. That case is set to light up proceedings next week, when E&Y makes its opening speeches.
Among other things, E&Y will argue that Equitable has used unrefined tactics in attempting to position E&Y’s stance as extreme.
‘It is the crudest possible tactic for the claimant to bring a claim of the present vast magnitude, and then to characterise both parties’ positions as extreme, in the hope that the Court will somehow assume that the truth lies somewhere in the middle. It does not,’ it says.
E&Y’s case is that it did not need to advise Equitable of the GAR liability; that the board already knew it existed; that the method of provisioning proposed by Equitable now is by no means the only way to provide for the liability; and that the idea that it should pay damages for subsequent losses, which it says cannot be attributed solely to this GAR issue or to the Big Four firm, is fanciful.
The outline of the case is expected to begin on Wednesday and take two days, before the real arguments start.
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