PWC sued for €1bn over alleged negligent auditing
THE joint administrators of Quinn Insurance Ltd (QIL) are suing the firm's former auditors, Price WaterhouseCoopers (PWC), for €1 billion over alleged negligent auditing.
Mr Justice Peter Kelly today granted an application by Paul Gallagher SC, for the administrators, to fast-track the action in the Commercial Court. He was told by Paul Sreenan SC, for PWC, the firm was consenting to transfer of the case to the Commercial Court but the claims against it would be vigorously defended.
The proceedings relate to an alleged failure by PWC to highlight that certain guarantees provided by QIL, established by now bankrupt businessman Sean Quinn, were threatening the future of the company. The claims also include that QIL had inadequate reserves.
The case involves the second largest claim to come before the court with only the proceedings in which members of Mr Quinn's family deny liability for sums of €2.34bn involving a larger amount.
Michael McAteer and Paul McCann of Grant Thornton were appointed joint administrators to Quinn Insurance in March 2010.
Last month, they secured permission from the President of the High Court to bring proceedings against PWC.
To date, the administrators have also secured permission to draw down some €1.12bn from the State-funded Insurance Compensation Fund to meet claims against the insurer. The administrators told the court in July 2012 they considered a total €1.65bn drawdown from the fund would be a "worst-case scenario".
QIL's Irish business, except healthcare, was sold in a deal involving US insurance giant Liberty Insurance last year.
PwC issued a statement this evening.
"PwC Ireland has consented today to the application of the Joint Administrators of Quinn Insurance Limited (Under Administration) to admit legal proceedings to the Commercial Court," it read.
"These proceedings are unjustified and devoid of merit. The affidavit, accompanying the application, contains assertions... with which we fundamentally disagree.
"The circumstances behind the proceedings are complex and technical and involve many interrelated parties, including the Joint Administrators themselves.
"We stand by the quality of our audit work and we will vigorously defend these proceedings."