Creditors slam Independent liquidators over delay in suing auditor and actuary

The provisional liquidators of Independent Insurance were this week accused of failing businesses hit by the collapse of the insurer by dragging their feet in taking action against the company's auditor and actuary.

Liquidators Dan Schwarzmann and Mark Batten of PricewaterhouseCoopers (PWC) announced that, after "extensive investigation," they would be taking action against Independent's auditor KPMG and actuary Watson Wyatt.

But, Kevin Young, who was chairman of the Creditors of Independent Insurance Group (CIIG) when the insurer went into liquidation in 2001, said: "We felt confident that KPMG and Watson Wyatt were liable four years ago, and pushed for action against them then.

"There were clear accounting and reserve problems and they should have been spotted. I am glad the liquidators are taking action, but it is four years too late. There are companies and individuals that may well have survived if the liquidators had not stalled on this. It is frankly disappointing."

Grant Ellis, chief executive of Broker Network, added: "The case against KPMG and Watson Wyatt could be more difficult to prove now so much time has passed. Memories aren't so fresh and people have moved on."

Erik Czerwionka, who was the owner of construction company Interbuild, said: "When Independent went under, we were owed £380,000 for work we had completed for them. If the liquidators went after KPMG sooner, then maybe my business would not have collapsed. We have been left completely out of the loop and now we are high and dry."

Dan Schwarzmann responded: "Obviously this kind of action is not taken lightly and we will do everything we can to recover assets for all the affected creditors as efficiently and effectively as possible."

What Independent's liquidators have recovere
Independent's liquidators this week published a summary of their progress in the recovery of assets since their appointment in June 2001.

  • Reinsurance: Over £109m has been recovered to date
  • Brokers: Subject to a market deal conducted with agency brokers, over 90% of amounts outstanding from brokers will be recovered, according to PWC. To date £27m of premium and return commission has been recovered.
  • Tax: The provisional liquidators have recovered over £49m from the Inland Revenue and Customs and Excise, representing the repayment of insurance premium tax (IPT) and corporation tax.

  • Property: £50m has been recovered from the sale of about 20 properties in Independent's portfolio.