E&Y trial risks firm's collapse
Ernst & Young's battle with Equitable Life could result in collapse for the Big Four firm, according to its chairman Nick Land.
Link: E&Y must answer Equitable audit failure claims
In one of the most important weeks for E&Y, Land wrote to John Vickers, chairman of the Office of Fair Trading as well as the prime minister’s office, claiming that ‘our cover is not adequate to meet claims at the level we are currently facing’. Land was referring to its £2.6bn negligence claim with Equitable Life, due to be heard at the High Court next April.
A spokesman for Equitable Life said that ‘the board’s advice is that it has a strong claim against E&Y’, although he would not comment on whether it would seek a settlement or take the case to trial.
Meanwhile, E&Y was due to submit its response to complaints made by the Joint Disciplinary Scheme by Friday last week. Roland Foord, a partner at City law firm Stephenson Harwood, said that while the JDS findings would not influence the civil judge should a trial go ahead, it ‘could have some effect in terms of settlement’ decisions.