The Quinn Insurance administrators have detailed how they received tens of millions of euro in professional fees, after a court application by The Irish Times for private reports on the demise of the defunct company.
The insurer’s collapse, one of Ireland’s largest insolvencies, cost taxpayers some €1 billion to pay liabilities the company could not meet. A surcharge is still imposed on all motor and home insurance policies to contribute to the cost of winding down the business.
Accountants Grant Thornton received €41.5 million over 13 years, according to a fee summary provided with 23 progress reports the firm submitted to the High Court on its Quinn Insurance work.
Grant Thornton partners Michael McAteer and Paul McCann were appointed joint administrators in 2010, work that continued until the High Court placed the insurer in liquidation last week.
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The Grant Thornton fees were in addition to €19.55 million in payments for legal services, in a further sign the fallout from the insurer’s collapse proved to be a lucrative source of income for accountants and lawyers.
GT Ireland fees include tax, company secretarial, forensics and transaction support work.
Disbursements include fees for actuarial services, court swearing fees and payments for couriers and taxis. Also included were “significant” IT disbursements for computer hardware, software and licences to progress the discovery stage of litigation against former Quinn Insurance auditors PricewaterhouseCoopers.
Solicitors Maples & Calder received €13.23 million and solicitors McCann FitzGerald received €6.35 million, inclusive in both cases of counsels’ fees for barristers.
The legal fees reflect costs incurred in both the administration and in a case the administrators took against former Quinn Insurance auditors PwC (PwC) for alleged negligent auditing, Grant Thornton said.
PwC denied such claims but paid €54 million last year to settle the case, inclusive of the administrators’ costs. PwC’s costs were €25 million, bringing professional fees in the administration and associated litigation to some €85 million.
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That sum is less than the €100 million calculation set out last week by The Irish Times in a report citing “legal provisions” for €32.47 million in litigation costs that the administrators set aside in annual accounts filed with the Companies Office.
In a report to the court last June, the administrators said their own costs would have reached €60 million for prosecuting the PwC case if they lost the action.
The progress reports were provided to the paper after it applied last week to Mr Justice David Barniville, president of the High Court, for access to the documents.
Grant Thornton had previously declined to release the records and the Courts Service said it could not provide them as they were not in the case file. In a brief hearing on Friday, Mr Justice Barniville thanked the administrators for making the reports publicly available with very light redactions for commercial sensitivity.
The documents set hourly rates paid to accountants and lawyers. The court-approved hourly rate for Grant Thornton partners was €375 from December 2011, down from €475 between March 2010 and November 2011. However, one an actuarial director with Grant Thorton UK was paid £625 per hour for work in 2012.
The standard hourly rate excluding VAT for Maples & Calder partners was €485 but a court-approved 15 per cent discount was applied from Mary 2013, cutting the hourly rate for work by partners on Quinn Insurance to €410.
The standard hourly rate for senior partners in McCann FitzGerald was €495. Such sums were discounted by 5 per cent after €500,000 in any year and the court-approved hourly rate was €470 between March 2010 and November 2011. From December 2011 onwards a 15 per cent discount was applied to the standard McCann FitzGerald hourly rates, bringing senior partners’ fees to €420 and junior partners’ fees to €382.
