The Irish Supreme Court has ruled that insolvent insurer Quinn Insurance (QIL) must provide security for the multi-million euro legal costs of accountancy firm PwC in an upcoming action over its auditing of the firm.
The cost of the case, which was first initiated in 2012, was previously agreed to be some €30m (£26m).
PwC’s application for security was originally denied by the High Court, before being overturned by the Court of Appeal, which ordered QIL to provide it. The Supreme Court then agreed to hear an appeal which it has now dismissed.
QIL was placed in administration in 2010, however its primary business is now prosecuting amid claims that PwC’s auditing of the business between 2005 and 2008 was reportedly negligent, which the accounting giant denies.
In the case, PwC argued that even if QIL’s claim was wholly successful, its liabilities would still exceed its assets by €200m (£173m), meaning it would be unable to pay PwC’s legal costs.
The chief justice for the Supreme Court stated: “For the reasons set out in this judgment I have, therefore, concluded that the Court of Appeal was correct to hold that QIL should be required to put up security for costs.
“In reaching that conclusion I have set out in some detail my views as to the proper approach to an application for security for costs in a case such as this.
”As a result of the decision The High Court will now decide how much security is expected to be provided. This will be revealed at a later date.