Moore Stephens facing £90m claim
Auditors face huge claim after multi-million pound suit is filed at the High Court with the help of litigation funding
Moore
Stephens, the City-based accountancy and advisory firm is embroiled in a
$173.6m lawsuit with one of its former clients
The claim against the firm is being funded through litigation funding, a
process rarely employed in the UK.
The claim has been lodged by collapsed company Stone & rolls, which went
into liquidation in 2002 and had close links to Croatian businessman Zvonko
Stojevic.
Through litigation funding third parties unconnected with the claimant or the
defendant provied the financial muscle to propel a claim through what can be a
lengthy and expensive court process in return for a share of the damages if the
claim is upheld.
S&R’s liquidator has alleged that the firm was negligent in its audit
activities between 1996 and 1998. It also accused Moore Stephens of dishonesty
on the part of two individuals involved in the audit work, and a resulting
failure to detect a pattern of fraud in which payments were made from the
corporate to groups controlled by Stojevic or associated parties.
City lawyers
Norton
Rose organised the finacial backing in conjunction with IM Litigation
Funding and is the largest facility that has been provided by IML in the UK
to date, the FT reported.
Moore Stephens told the FT that the suit had been filed, adding that it
considered it ‘wholly illegitimate’ and saying that it would fight its corner
‘vigorously’.
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