UK – Consulting firm Watson Wyatt is confident it will win a negligent advice claim brought against it by Credit Lyonnais that was first filed almost two years ago.
Credit Lyonnais Securities and the trustee company of the French Bank’s UK pension fund, Credit Lyonnais Trustees Ltd. filed the claim against Watson Wyatt LLP, Watson Wyatt Partners and Watson Wyatt Worldwide on March 28, 2003.
The fact that the claim was filed in 2003 counters market talk that Credit Lyonnais' action was timed to benefit from Watson Wyatt LLP's takeover by US affiliate Watson Wyatt & Co.
Watson Wyatt, represented by Simon Konsta of Barlow Lyde & Gilbert, had not mentioned the claim in its annual reviews and has not openly spoken about it until recently, spokesman Bruce Wraight confirmed.
“I am sure we have done everything legally required,” Wraight said. “We feel we are going to win the claim. We believe the client is misguided.”
Legal experts have expressed doubts to IPE that the action would succeed but suggest that if it did it could “open the floodgates”.
The trial has been scheduled for April 25 this year with Nicolas Bragge, a Master of the Supreme Court, Chancery Division appointed for the first hearing.
A clerk for the Chancery Division explained to IPE that the two-year gap between the filing of the claim and a trial was not unusual. The timescale depends on many factors, he said.
The claim reads: “Claim for damages, interest and costs for breach of contract and/or fiduciary duty and/or negligence in respect of the provision of and/or failure to provide actuarial, investment and consultancy advice and/or services.”
According to the document, Credit Lyonnais - represented by law firm Taylor Wessing - expects “to recover more than £15,000”.
The claim was signed by John Cunliffe, director of Credit Lyonnais Trustees Ltd., and Frederic Melul, managing director at Credit Lyonnais Securities.
A barrister for a leading legal firm told IPE that negligence cases tended to be reasonably short, lasting between three and 10 days. A two-to-three-day trial could cost between £350,000 and £1m.
Commenting on the possible consequences for the defendant, the barrister stated in an e-mail: “If it is alleged that the general actuarial principles used by a major player like Watson Wyatt are suspect, then the implications would be huge.”
“However, these sorts of cases tend to turn on their own exact facts and may be of more limited note in consequence,” he added.
Alexander Kent, pension fund manager for Credit Lyonnais UK Pension scheme declined to comment.