EY agrees multimillion-euro settlement of Anglo Irish case

The 2012 case sought €50m in damages over losses allegedly resulting from auditor’s failings

Anglo Irish Bank’s former auditor EY Ireland has agreed to pay a multimillion-euro amount to settle a long-running case over its failure to uncover the habit of the lender’s former chairman, Seán FitzPatrick, of moving loans off its balance sheet at the end of accounting periods before the financial crash.

Irish Bank Resolution Corporation (IBRC), as Anglo was renamed in 2011, sued EY in 2012, claiming more than €50 million of damages over losses it expected to sustain from Mr FitzPatrick’s practice of temporarily refinancing tens of millions of euro of personal loans with Irish Nationwide Building Society (INBS) at the end of Anglo’s financial year to allegedly avoid disclosure to investors.

Over a nine-year period, Mr FitzPatrick refinanced loan facilities with INBS which amounted to more than €122 million in 2007 alone. IBRC was put into liquidation in 2013 and Mr FitzPatrick died in November 2021.

EY has defended its work as auditor of the now-defunct lender. “As a consequence of a mediation which took place on 23 January 2023, the parties have agreed to compromise the proceedings on confidential terms, without admission of liability,” a spokeswoman for EY said.


Earlier on Wednesday, counsel for IBRC’s liquidators, Eoin McCullough SC, informed the High Court that a settlement had been reached.

The Irish Times has subsequently established that EY has agreed to pay a multimillion-euro amount to resolve the 11-year-old case.

The so-called bed-and-breakfast transactions came to light in 2008 when, due to market turmoil, Mr FitzPatrick could not refinance his loans with INBS “as had become usual”, IBRC claimed at the time of the 2012 lawsuit.

He resigned as Anglo chairman in December 2008 and was declared bankrupt in 2010. IBRC estimated at the time of the original lawsuit that it expected to suffer “well over €50 million” of losses on loans to the former chairman.

A criminal case against Mr FitzPatrick relating to the transactions collapsed in May 2017, with Judge John Aylmer ordering that the former banker be found not guilty of hiding loans from auditors.

In his ruling, the judge strongly criticised the investigation by the Office of the Director of Corporate Enforcement (ODCE) into the matter, including the “extraordinary” shredding of documents by the ODCE investigator, Kevin O’Connell, and the coaching of witnesses, meaning there was a real risk to Mr FitzPatrick of an unfair trial. The case was actually a retrial. The first one collapsed in May 2015 after it emerged that Mr O’Connell had shredded documents potentially relevant to the investigation.

Meanwhile, Chartered Accountants Ireland’s professional standards unit, formerly known as Carb, is continuing a long-running inquiry into aspects of EY’s €1 million-a-year work as Anglo’s auditor before the crash.

A preliminary report carried out by former comptroller and auditor general John Purcell in 2011 for Carb said there was “prima facie” evidence that EY – then known as Ernst & Young – had a case to answer on major errors in the bank’s 2008 accounts.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times

Ellen O'Riordan

Ellen O'Riordan

Ellen O'Riordan is an Irish Times reporter