The London High Court has ordered
PricewaterhouseCoopers UK (PwC) to pay damages of £427,000
($648,000) over its valuation work of Ryhurst Limited, although the
penalty was significantly lower than the £35m originally
sought.

Derek Dennard, Michael Gearon, Graham Turner
and Colin Peter Dixon, who set up Ryhurst Limited as a vehicle to
bid for PFI projects in the health care sector, sued PwC after
alleging their shares in 11 PFI projects had been negligently
undervalued.

In January 2006, the men sold shares in
Ryhurst Limited for £5.5m to a subsidiary of Barclays Bank on the
basis of a PwC valuation in May 2005. The bank went on to sell the
shares 11 months later for about £40m, an increase of 736%.

The businessmen alleged this inflated sum
represented the true open-market value and PwC had substantially
undervalued their shares. They sued the Big Four firm for the
difference, £35m.

Lawyers representing PwC claimed that Barclays
was in a strong bargaining position when it bought the shares
because it could have ensured it was the only potential bidder
under certain rights it had.

Justice Vos said that even though PwC were in
breach of the valuation engagement, the highest price Barclays
would have bought the shares for at the time of bidding was £6.5m,
and there was only a 75% chance that would have been the case.

Therefore, the court ruled the plaintiff was
entitled to £427,000 in total damages for their loss of chance.

PwC are considering an appeal.