Court backs Andersens in De Lorean crash case

Arthur Andersen last week secured another victory in its 12-year fight against the UK Government’s $500m lawsuit over the audit of collapsed De Lorean Motor Cars in 1982.

A New York federal judge threw out the case against Andersens on 11 February, but added that the Government could refile some claims in a state court.

If the Government pursues the case in the lower state court, it will be barred from claiming its costs which are estimated to be around #15m.

An Andersens spokesman welcomed the decision, saying: ‘This is a further vindication of the position we have held for the last 12 years that the UK Government’s case should never have been brought in the US courts.’

In his ruling, the federal judge criticised the Government for showing itself to be ‘a singularly intractable participant’ in the lawsuit.

He added that the UK Government had a political agenda, citing comments from the Secretary of State for Northern Ireland, who had said that ‘it would be disastrous both politically and commercially to pull the plug out on the company at this stage’. The judge added that moving the case to a state court, might help to reduce the case ‘from a miasma of frequently rhetorical and conclusory allegations and a Niagara of paper to a manageable and focused dispute’.

The Government sued Andersens in 1985 in the US courts, claiming fraud, conspiracy and negligence. Since then, Andersens has been on a Government blacklist, preventing it from doing public sector work.

The Government suffered a major setback last April when the New York courts dismissed its bid to sue Andersens for triple damages, worth $1bn, under racketeering laws. In August, it was further humiliated when the court gave permission for secret Cabinet papers on the case to be made public.

The papers revealed that the project had been set up by the Labour government in the 1970s and kept alive by subsequent Conservative administrations for political reasons.

The UK Government gave US financier John De Lorean more than u70m between 1979 and 1981 to build gull-winged sports cars in Northern Ireland.

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