Slaughters presses on with Coopers & Lybrand writ

SLAUGHTER and May's multi-million pound action against former Barings auditors Coopers & Lybrand and Deloitte & Touche is set for a three to four-month trial after the issue of a writ last week.

The suit is on behalf of administrators Ernst & Young.

Slaughters litigation partner Deborah Finkler denied the suit was merely a holding action.

“As soon as we receive their service acknowledgement, they will receive substantial statement of claim,” said Finkler.

The action is for negligence and breach of contract for providing auditing services, according to the writ.

Coopers & Lybrand, instructing Barlow Lyde & Gilbert, has expressed surprise at the action and denied any liability for the Barings collapse.

Ashurst Morris Crisp is now sharing the job of advising the Barings administrators with Slaughters after a recommendation by Slaughters partners.

Slaughters brought in Ashursts because of a possible conflict of interest. The decision followed the conceivably embarrassing situation of Slaughters partners having some of their earlier documentation work being examined in court last November.

The appointment of Ashursts means the administrators are in a prime position to sue the Barings directors without fear of conflict for Slaughters, Barings advisers for around 100 years.

Slaughters had some involvement in drafting trust deeds for the holders of guaranteed floating rate capital notes issued in 1986.

These '86 Notes were locked in a High Court battle against the '94 Notes over $150 million assets of Dutch subsidiary Barings BV.

The '94 Notes, represented by Clifford Chance, won the case and the '86 Notes, represented by Theodore Goddard, are likely to appeal.

“I suspect it's been somewhat embarrassing for Slaughters and May,” said Clifford Chance partner Andrew Wilkinson.

However, Finkler said: “There were no criticisms in the judgment about Slaughters whatsoever.”

Linklaters & Paines managing partner Terence Kyle, who acted for Credit Suisse Boston which placed the '86 Notes in the market, also gave evidence in the November Notes.