Elton John appeals negligence suit against accountants

By Advocate.com Editors

Originally published on Advocate.com June 12 2002 11:00 PM ET

Lawyers for gay pop icon Elton John went to the Court of Appeal in London Wednesday hoping to revive his multimillion-pound negligence claim against his former accountants. The star alleges that PricewaterhouseCoopers was negligent in burdening him with millions of pounds in touring debts and is seeking £7 million ($11 million), plus interest, his counsel said. During the hearing, which is expected to last two days, three appeal judges will consider whether to overturn a High Court ruling against John's negligence claim.

At a hearing last year, the High Court also dismissed John's claim of negligence against Andrew Haydon, former managing director of John Reid Enterprises, John's longtime management company. John is not appealing that part of the High Court decision. John's lawyer, Mark Howard, said Wednesday that the star believes PricewaterhouseCoopers erred because it failed to report to him that he, rather than his management company, was bearing the costs of paying tour agents. This made it impossible for John to reclaim the money from the management company, Howard said. Howard added that the hearing must investigate the duties and responsibilities of the management company and whether it or John was responsible for paying tour agents.

"Was it Sir Elton, notwithstanding the fact that he was already paying a sizable fee to John Reid Enterprises for its services, or was John Reid Enterprises obliged to pay tour costs out of fees it was paid by Sir Elton?" Howard asked. Howard said tours provided a sizable chunk of John's income and that the star had agreed to pay his management company 20% of his gross earnings--"a very generous amount to pay for someone in Sir Elton's position." During the High Court hearing, lawyers for PricewaterhouseCoopers and Reid depicted the star as a free spender with a poor grasp of his personal finances. The 54-year-old performer admitted he enjoyed a "somewhat lavish lifestyle" and that he had spent $42 million on personal expenses--including $410,000 on flowers--over a 20-month period.

A High Court judge described John as "clearly a man of an uncommonly generous disposition" and a man of great intelligence but who has "little or no interest in business matters."