Big Four

Litigation funder backs £250m KPMG lawsuit over Carillion audit

The agreement will provide a finance facility to fund a High Court claim against the Big Four firm

Litigation Capital Management (LCM), a litigation funder, has entered into a deal with the liquidators of Carillion to fund a £250m lawsuit against KPMG.

The agreement will provide a finance facility to fund a High Court claim against the Big Four firm, who acted as Carillion’s former auditor.

LCM said that the claim has risen from KPMG’s conduct of its audits of the construction company’s financial statements, which supposedly led to in excess of £250m in losses.

Carillion is currently being wound up by the Insolvency Service’s official receiver, which claimed in legal documents last year that KPMG’s unqualified audits led directors to pay nearly £250m in dividends and advisers’ fees over the course of two years.

Nick Rowles-Davies, executive vice chairman of LCM, said: “We are delighted to be supporting thousands of creditors who have suffered as a consequence of the biggest insolvency in recent UK history.

The litigation funders will provide investment to pay fees related to legal claims in return for receiving a portion of the awarded damages on claims that succeed.

Patrick Moloney, CEO at LCM, said: “As a pioneer of the litigation finance industry, LCM has long and deep experience in funding insolvency related disputes. As such, LCM is extremely well placed to tailor a finance package to pursue these claims.”

KPMG is already under separate investigation by the FRC in relation to Carillion’s 2018 collapse.

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