Stone & Rolls Ltd (in Liquidation) v Moore Stephens

Stone & Rolls Ltd (in Liquidation) v Moore Stephens

A high profile example of the unpredictability of litigation and, therefore, the risks of third party litigation funding 


The claimant company brought a substantial claim for professional negligence against its former auditors, with the benefit of third party funding.  The Court of Appeal, reversing the first instance decision, held that the auditors had a defence and accordingly struck out the claim.  However, in a majority decision the House of Lords dismissed the claimant’s appeal 


The funder duly accepted liability for the auditor’s costs, reported as being in the region of £2.5 million.  It was also reported that there was no ATE insurance to cover these adverse costs 


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