Big Four accountancy firms PwC and EY have been awarded an extra £1m in costs each after a successful appeal over the largest private prosecution bill ever submitted to the Legal Aid Agency.

Legal expenses insurer DAS UK Holdings submitted a bill of around £7m after it prosecuted former chief executive Paul Asplin, ex-head of claims David Kearns and one-time head of marketing Sally Jones for conspiracy to defraud by making ‘secret profits’ through medical report business Medreport – which received ‘an immense amount of business’ from DAS.

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Asplin, who was also convicted of false accounting, perpetrated a 14-year fraud on the company and in 2018 was jailed for seven years by Judge Nigel Beddoe, who reportedly described him as ‘a greedy, arrogant and manipulative man who for years exploited the trust the German shareholders had in you’.

Kearns and Jones were sentenced to 51 and 39 months’ imprisonment respectively by Beddoe, who also ordered the payment of the prosecution’s costs out of central funds.

The DAS prosecution bill, which is said to be ‘by far the largest private prosecution bill ever submitted to the LAA’, included the costs of EY’s pre-prosecution investigation of nearly £2m and PwC’s costs of £1.44m for its work on disclosure – but just £120,000 of EY’s costs and £80,000 of PwC’s were allowed.

Five barristers were also awarded tens of thousands less than they claimed, with initial leading counsel Michael Brompton QC losing 30% of his preparation fees as ‘a penalty for his performance’ on the defendants’ successful abuse of process application, which was ‘robustly overturned’ on appeal.

Costs Judge Mark Whalan ruled last week that PwC should receive more than £1.3m for its work, during which it reduced 4.3 million documents to 42,500 for disclosure to the defendants, and that EY ought to get just over £1m – of around £1.46m in issue on the appeal – for its investigation.

He also granted the full fees claimed by Brompton (£134,000), subsequent leading counsel Richard Whittam QC (£335,000) and disclosure counsel Rebecca Chalkley (£260,000), as well as almost all of the costs for juniors Andrew Bird (£485,000) and Henry Hughes (nearly £210,000).

The £75,000 claimed for an internal investigation by the chief risk and compliance officer at DAS and £25,000 claimed by accountancy firm BDO were also allowed by the judge. However he refused to allow £9,200 sought for noting briefs at the trial.

 

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