The High Court yesterday gave the go-ahead for the serving of a summons on PricewaterhouseCoopers in a case where the administrators of Quinn Insurance are seeking damages arising from the accountancy firm's work as auditors to the collapsed group.
It is understood the summons was served yesterday on a partner from the firm as part of a process where an application is expected to be made shortly to the Commercial Court for the hearing of the case there.
Losses from the insurance group formerly owned by the family of bankrupt businessman Seán Quinn are expected to cost the Insurance Compensation Fund up to €1.6 billion and have led to the introduction of a 2 per cent levy on all home, motor and commercial insurance policies.
Barrister Bernard Dunleavy, for the joint administrators Michael McAteer and Paul McCann of Grant Thornton, told the court that a report had been prepared by Michael Collins SC and Paul Gallagher SC covering the matters of guarantees and reserves, and it was considered appropriate that the case should go ahead.
Minister for Finance Michael Noonan had been updated on the preparations for the case and had no objection to the course of action being taken, Mr Dunleavy said. An application would be made shortly to the Commercial Court.
Mr Justice Kearns said he was happy that the administrators proceed as suggested, opening the way for the serving of a summons on PricewaterhouseCoopers.
PwC is a partnership meaning it is owned by its partners rather than having a structure (limited liability) that limits the exposure to liability of its owners. It has just under 100 partners. The firm had no comment to make yesterday. It is usual for firms such as PwC to be insured against claims such as the one being taken by the joint administrators.
Adequate reserves
Last year Mr McAteer told an Oireachtas committee that it appeared that prior to his appointment there had been a reluctance in Quinn Insurance to provide adequate reserves for large cases. When the size of the insurance group's reserves were later deemed to be inadequate, the effect of this was to "question whether the company had been historically profitable".
The administrators were appointed after the Central Bank found that assets of the insurance group had been used to guarantee loans issued by Anglo Irish Bank to Quinn companies associated with foreign property investments.
Mr McAteer told the committee the administrators were examining whether they could recoup some of the money lost by suing those who gave professional advice to Quinn Insurance.
Quinn case important to us all: page 2
