Norton Rose has won a u67.6m out-of-court settlement for the administrators of Maxwell Communication
Corporation (MCC) in one of the first post-Woolf cases to be heard.
Coopers & Lybrand, advised by partners Stuart Hall and Oscar Harrison-Hall at Barlow Lyde & Gilbert, have agreed to pay u5m, followed by u35m in July and the rest the following year, for negligence and breach of contract. Coopers also dropped claims for u300,000 of unpaid fees.
Valerie Davies, head of Norton Rose's corporate and banking litigation group, led the legal action for MCC and has advised on the litigation since 1989.
Davies took the decision to disregard transitional arrangements and opt for a hearing under new procedures introduced by the Woolf reforms.
Davies says a summons was issued under the old system. But by the time of the hearing the new regime was in force.
"Our application started on the first day of the new reforms," she says. "We were certainly one of the first cases to be heard. It was very much in frontier territory.
"We managed to get an accelerated trial date, which shows the courts are willing to set much quicker timetables for cases coming on to trial than would have been the case before the Woolf reforms," she says.
Davies says the settlement, which she regards as in the top bracket of negligence settlements against UK accountancy firms, is "excellent news" for the creditors.
"However good one's case is, there are always uncertainties, costs and the length of litigation to be taken into account," she says.
Price Waterhouse was appointed MCC's administrator to recover u1.9bn for its creditors, but Davies says the firm was forced to make a novel application to the court to substitute audit advisers from Price Waterhouse when the accountancy firm agreed to merge with Coopers & Lybrand last year. Grant Thornton was then appointed administrators.