PracticeAccounting FirmsJudge retires to consider Equitable decision

Judge retires to consider Equitable decision

Ernst & Young's attempt to have the £2.6bn Equitable Life negligence action against it struck out at the High Court, finished yesterday with the judge retiring to make his decision.

Link: E&Y: don’t blame us over Equitable

Mr Justice Langley is expected to deliver his ruling in the next few weeks. Whatever the outcome, experts expect the losing party to appeal.

It followed a summing up from Mark Hapgood, QC, the barrister acting for the Big Four firm, who attempted to prove the case has no reasonable prospect of success.

Delivering his summing up to a packed court room, Hapgood said there was a ‘formidable catalogue of indisputable facts’ in favour of E&Y and that the basis of the Equitable Life claim ‘rests wholly on opinion.’

Iain Milligan, QC, the lawyer acting on behalf of Equitable Life, had previously accused E&Y of signing off its accounts without insisting on the inclusion of a £1.6bn provision to plug a black hole in its finances. If the board of directors had known, Milligan argued, they could have sold the business as early as 1998.

Hapgood said it was important to note that an auditors ‘scope of duty’ did not extend to determining the goodwill value of a business. Hapgood also revealed that Equitable turned down the chance of a merger with rival Scottish Widows in 1998.

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