GLEN DIMPLEX, the global electrical appliance manufacturer, has lost a UK court claim for professional negligence against the top actuarial firm Mercer.
The Irish firm claimed that it overpaid for the UK firm Stoves after an actuarial valuation report, compiled by Mercer, substantially underestimated the deficit in the company pension fund.
The report for the Stoves fund showed a deficit of £1.35m (€1.93m) in 2000. However, it later transpired that the actual deficit was £4.5m. Glen Dimplex paid £12m for the UK-quoted Stoves in December 2000.
According to a recent judgment in London’s High Court, Mercer accepted that the report had been prepared “without the standard of care to be expected of professional actuaries”. However, it denied that it had a “duty of care” to Glen Dimplex in the takeover and was at all times acting for the pension fund.
It alleged that Dimplex contributed to its problem by not appointing its own actuarial adviser. Dimplex’s legal advisers DLA had recommended that Dimplex hire its own actuarial advisers.
The problems over the pension fund deficit crystallised quickly for Dimplex when it implemented a wide-ranging restructuring at Stoves after the takeover.
Glen Dimplex received better news from the American courts last week where it was awarded $8.5m (€6.3m) in damages from the Canadian-quoted heater manufacturer CFM Corporation in a patent infringement suit.
From The Times