PracticeAccounting FirmsE&Y’s Land fears bankruptcy

E&Y's Land fears bankruptcy

Following the Office of Fair Trading's disappointing report on a possible liability cap, Ernst & Young UK chairman Nick Land has admitted that the firm could go bankrupt because it lacks adequate insurance cover to deal with negligence claims against it.

Link: Special report: Liability cap

According to the Daily Telegraph, Land wrote to John Vickers, chairman of the OFT, saying: ‘Our cover is not adequate to meet claims at the level we are currently facing and adequate cover is simply unobtainable. Similarly, there is no evidence that such cover will become available.’

E&Y is being sued for £2.6bn by Equitable Life over allegations that it should have noticed that the life insurer’s guaranteed contracts were too expensive.

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