EY avoids judgment in £2bn case as Alvarez & Marsal reach ‘confidential agreement’
The mammoth legal fight against the Big Four giant EY over its auditing of a former London-listed health giant that collapsed amid fraud allegations has been withdrawn following a settlement.
Private hospital operator NMC Health Plc collapsed in April 2020 after being placed into administration, and was delisted from the London Stock Exchange in the same month.
Headquartered in the United Arab Emirates (UAE), the group was part of the FTSE 100 and, at its peak in August 2018, had a market value of £8.6bn.
EY was the group’s auditor from 31 December 2012 until NMC was placed into administration on 9 April 2020.
The administrators of NMC Alvarez & Marsal filed a £2bn legal action against EY in the London High Court. The case went to trial last May before Dame Clare Moulder and ran for 15 weeks.
According to the recent administrator’s report, Alvarez & Marsal has received over £12.8m in litigation funding to pay the costs of its claim against EY. The administrators had accused EY of being “grossly negligent” and failing in its most fundamental audit duties.
The case was awaiting the judge’s ruling at trial, but in a twist of events an order was filed last Thursday stating that NMC had withdrawn its claim. The order to Dame Clare Moulder said, “there shall be no order as to the damages claimed or as to the costs of the claim”.
A spokesperson for Alvarez & Marsal confirmed a confidential settlement had been agreed between the parties.
“NMC Health PLC has resolved the claim it brought against its former statutory auditor, Ernst & Young LLP. The claim has been resolved without admission of liability. The settlement agreement and its terms otherwise remain confidential.”
The Big Four giant confirmed it was “no longer in dispute with the administrators of NMC Health”.