Equitable Life and auditor liability, part 1

The seemingly never--‐ending Equitable Life litigation is finally over (although numerous investigations still continue). The case’s inevitable collapse is evidence that in the post--‐Woolf era, largely pointless, ill--‐conceived and ludicrously expensive cases still occur. This case garnered attention from a number of parties for numerous reasons. It grabbed the media’s attention due to the mammoth damages and costs involved. Policyholders attention concentrated on the £75 each of them loss due to the failed litigation. For company lawyers, however, the focus of the case concerned the extent of the auditors’ and directors’ liability – two issues that company law has struggled to adequately resolve for decades. In the first of a two--‐part article, Equitable Life’s case against their auditors, Ernst & Young, will be examined.1 Before focusing on the issues involved, a reappraisal of the facts of the case and the litigation to date will be of aid.