Equitable could be forced to pay ‘millions’ extra in costs, after refusing to
drop part of its lawsuit against former auditors Ernst & Young.
The Big Four firm last week pledged to claim indemnity costs at the highest
level from the life assurer, after Equitable refused to drop a claim against E
&Y that it has barely mentioned in the course of the trial, now in its tenth
Equitable is pursuing several claims against E&Y, including one that
alleges E&Y’s negligence deprived it of the chance to sell off some of its
back office functions to shore up its financial position.
Equitable has hardly mentioned the lost sale claim thus far, prompting E
&Y to ask if it intended to continue with this aspect of the claim.
Equitable said in court on Friday that it did intend to pursue it.
Mark Hapgood, for E&Y, said: ‘Our view of the lost sales claim is that it
is absolutely hopeless, it is doomed to failure, we do not believe it can be
pursued any longer.’
Hapgood added that, if that aspect did not succeed, E&Y would claim for
‘indemnity costs’ against Equitable, which E&Y later said would run into
‘millions of pounds.’
Successful defendants awarded costs will often only receive 70%-80% of their
costs in court cases, in recognition of the fact that not all legal costs are
regarded as necessary.
In cases where defendants successfully argue that the case is of such little
merit that it should not have had to defend it in the first place, they can
claim indemnity costs, covering every cost incurred.
HMRC breaches client confidentiality; and partner profits fall at EY. These stories and more discussed in Friday Afternoon Live
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