Professional negligence in the insurance sector
Appointment Type: Party appointed expert
Service Area: Professional Negligence
Industry: Services & Consultancy
Sub-category: Insurance reinsurance
Instructed as party expert by the claimant in litigation proceedings relating to professional negligence.
The claimant was a UK company operating in the insurance sector that had recently been acquired by a specialist private equity firm. Post-acquisition a number of problems were identified within the company’s client money systems and records, this included a significant shortfall in the amount of client money that should have been held.
As a result the claimant brought proceedings against the company’s former auditor, as well as against the former finance director of the company. The principal accusations against the auditor were that they did not fulfil their duties, both as statutory auditor and CASS auditor, by failing to identify the shortfall in client money, failing to identify the problems with the client money systems, and failing to deal appropriately with a number of other significant accounting issues.
The instructions to the expert were to undertake a review of the auditor’s working papers in relation to the statutory audit and CASS audit in order to identify any deficiencies in audit procedures and judgements. Subsequently the expert was instructed to produce a report based on these findings for use in mediation and, if necessary, at trial.
Following the provision of the report the parties entered into mediation and a settlement agreement was reached.