The settlement of Equitable Life’s negligence claim against Ernst & Young (E&Y) meant that the legal world was denied a judgment on the thorny issue of auditors’ liability. But the massive MAN v Freightliner case has turned up to fill that gap. MAN Group, represented by Slaughter and May and 7 King’s Bench Walk’s Dominic Kendrick QC, sued DaimlerChrysler subsidiary Freightliner for £350m in damages arising from losses made after the acquisition of truck manufacturer ERF from Freightliner forerunner Western Star. Freightliner, advised by Clifford Chance and 3 Stone Buildings’ Geoffrey Vos QC, promptly attached E&Y to the claim as a Part 20 defendant, alleging that the auditor should have picked up on the fraudulent accounting of ERF’s financial controller and was therefore liable. On 28 October, Lord Justice Moore-Bick said Freightliner’s claims went far beyond the scope of E&Y’s duties as auditor, and found that it had no duty of care to MAN and was not liable for the losses. It was another successful outcome for E&Y, which was represented by Linklaters and Four New Square head Justin Fenwick QC.
what next for corporate? By Donna Sawyer