KPMG could escape a costly legal battle over the collapse of Independent Insurance because creditors are short of cash.
Kevin Young, chairman of the Creditors of the Independent Insurance Group, admitted more money was required if the class action to recover funds was to proceed. Young told Accountancy Age there was ‘compelling evidence’ for legal action against a number of parties. But he said creditors had shown a ‘disappointing financial commitment’ to the cause.
Following the fall of Independent in June, auditor KPMG was identified as a target for creditors.
If auditors were found to have acted negligently, the firm could face action by liquidators from PricewaterhouseCoopers. And the accountants’ Joint Disciplinary Scheme could also bring proceedings, though the ICAEW is still to make a decision.
KPMG maintained it had ‘no legal case to answer’.
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