PracticeAuditFRC to pay almost £1m in costs over Mayflower case

FRC to pay almost £1m in costs over Mayflower case

FRC must fork out £987,000 in costs to former FD David Donnelly and auditor PwC as a result of failed Mayflower case

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Costs of £987,000 have been awarded against the industry’s disciplinary
board, which brought complaints against Mayflower FD David Donnelly and the bus
manufacturer’s auditors,
PricewaterhouseCoopers last year.

PwC and Donnelly asked for a collective £1.4m during costs hearings, which
began in-camera last month.

The five-member independent panel, which deliberated over the proceedings,
has made awards of £587,500 in favour of Donnelly and £400,000 to the firm.

PricewaterhouseCoopers are pleased with the outcome of the costs hearings of
the Mayflower case, made in favour of the firm.

‘We are pleased with the award of costs made by the Tribunal and the
commonsense approach they have taken in making the award,’ a PwC spokesman said.
‘We do not believe that the complaints should have been brought, and significant
costs could have been saved by all parties.’

In addition, the independent panel –
that earlier dismissed the complaints against Donnelly and the firm and now made
the costs award – expressed the view that cases against both the firm and the FD
should never have been brought.

The AIDB lost cases in both instances.
The body’s parent, the Financial Reporting Council, said in a statement that it
was ‘disappointed’ with the decision.

Paul Boyle, chief executive of the FRC – the AIDB’s parent body – declined to
give details of whether the FRC would take the matter further.

‘We’re carefully studying the implications this ruling may have on future
cases,’ said Boyle. When pressed as to whether the FRC might consider the
applying for a judicial review, he said: ‘We’re not ruling out any options.’

An FRC statement stated: ‘The FRC continues to support the function of the
AIDB, as set out in its scheme. Where there is evidence of misconduct, as there
was in the Mayflower case, it is important that the complaint should be heard by
a Disciplinary Tribunal sitting in public.’

Further reading:

FRC faces £1.4m Mayflower crunch

Watchdog accused over expert witness

Full Mayflower judgement out

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