High Court finds in favour of novel duty of care on employers (or quasi-employers) to protect against economic loss by providing an “ethically safe” work environment

In a recent decision, the High Court has awarded a former partner of Ernst & Young (EY) damages exceeding $11 million, broadly equating to past and future earnings for the rest of his career: Rihan v Ernst & Young (Global) Ltd [2020] EWHC 901 (QB). The claimant, Mr Rihan, was a whistle-blower who publicly disclosed suspected irregularities arising out of an audit for a client for whom he was the audit engagement partner, and unilaterally left EY.

While the facts of the case arose in an audit and accounting context, the decision will be of interest more generally. In particular, the duty of care found to have been owed by EY to Mr Rihan was to protect against economic loss (in the form of loss of future employment opportunity), by providing an “ethically safe” work environment, free from professional misconduct. Further, although Mr Rihan was a partner in EY working in Dubai, the court found that this duty was owed (and breached) by four UK-based EY entities.

For more information see this post on our Banking Litigation Notes blog.

Note: The appeal in this case was dismissed by consent on 31 December 2020.