The High Court has ordered Quinn Insurance Limited, which is under administration, to provide further details of parts of its claim against its former auditor, PricewaterhouseCoopers. The order concerns alleged errors in insurance claim reserves and the losses Quinn says it could have avoided if problems had been identified earlier.
The ruling, delivered by Ms Justice Costello on 19 May 2015, concerns a procedural motion in Quinn’s action for alleged breach of contract and duty. The underlying claim relates to PwC’s audits of Quinn’s financial statements and regulatory returns for 2005 to 2008. The judgment describes potential damages as being in the order of €800 million; it does not decide whether PwC was negligent or liable.
Quinn alleges that its “Technical Provisions”—estimates of future insurance claims—were materially understated and that PwC should have identified the problem. Quinn’s administrators commissioned Mazars to make fresh estimates. The judge said PwC was entitled to particulars explaining why Quinn alleged the original estimates were materially wrong, and directed replies to specified requests concerning alleged errors in those estimates.
But the court refused most requests seeking details of how Mazars performed its re-estimation or a comparison between Mazars’ figures and the earlier estimates. The judge said Quinn’s case did not depend on a direct comparison, and that such detail concerned evidence for trial rather than particulars of the pleaded claim. She also noted that Quinn said it had not carried out the requested comparison analysis.
On claimed underwriting losses, the court ordered Quinn to explain in more detail how it said it would have changed its pricing, raised rates on loss-making business lines, or exited the Great Britain and Northern Ireland market if the alleged reserve problem had been raised. The judgment records Quinn’s estimates of avoided losses and other claimed consequences, but does not determine those claims. It refused requests for details of specific gifts Quinn said it would have avoided, reasoning that its case concerned the overall amounts of gifts in relevant years.
The judge also refused requests for file-by-file details about reopened insurance claims, including their value and reasons for reopening. Quinn’s pleaded case relied on the number of reopened files, not the reasons or values; the judgment records totals of 1,282 in 2005, 5,456 in 2006, 22,051 in 2007 and 31,350 in 2008.
The court directed replies to the listed particulars and refused the rest. It left the time for compliance to be addressed after hearing the parties. The order determined the scope of particulars only; the underlying claim remained unresolved.