The decision in the case of Wine Enterprise Investment Scheme Ltd v Crowe U.K. LLP [2026] emphasises the value of making competitive settlement offers especially when faced with a slew of poorly substantiated claims that are likely to be expensive to defend.
The claimant, Wine Enterprise Investment Scheme (“Wine Enterprise”), ran an investment scheme in fine wines but went into liquidation. The defendant, Crow U.K. LLP (“Crowe”), audited Wine Investment and was alleged to have failed to identify misfeasance by Wine Investment’s directors who were said to have used the company to run a pyramid-style fraud. Wine Investment’s claims against Crowe related to several years when Crowe audited the Wine Enterprise and, in respect of each year, the amount of damages claimed from Crowe ranged from between £3.35 million to £8.42 million.
Wine Enterprise levelled wide-ranging allegations against Crowe and, in order to try to resolve the dispute, Crowe offered to pay £3.175 million together with the Wine Enterprise’s reasonable costs. The case went to trial and the judge decided that Crowe was only liable pay damages of £101,965.95 or just 1.6% of the amount claimed.
When the Court decided who should pay the costs of the litigation, Crowe argued that Wine Enterprise should pay its costs because the amount of the damages awarded was substantially less than the amount of its offer.
Wine Enterprise was ordered to pay 85% of Crowe’s costs up to the expiry of the 21-day period in its offer and all of its costs together with interest after this date. The following issues were relevant to the Court’s decision:
- The amount of damages awarded to Wine Investment was a small proportion of the amount claimed;
- Numerous failed allegations against Crowe had substantially increased costs;
- In respect of some of the years when Crowe was auditing the accounts, no damages were found to be payable;
- Wine Enterprise would never have been brought the claim if it had anticipated recovering only £101,965.95.
The case underscores that professional services providers or other defendants facing claims should consider making competitive settlement offers at an early stage in the proceedings. This puts pressure on the claimant and provides costs protection of the type that Crowe benefited when faced with the substantial costs of defending a plethora of speculative arguments.
Alex Haddad (ahaddad@nocklds.co.uk / 0203 892 6805) works in the litigation department and deals with litigation relating to businesses and property.