Big four financial services firm KPMG has reached an agreement in a £1.3 billion lawsuit brought by liquidators of collapsed construction and outsourcing giant Carillion.
The lawsuit relates to audits of Wolverhampton-based Carillion's accounts by KPMG between 2014 and 2016.
It was launched by the Official Receiver last year after the finance firm was accused of missing "red flags" during its audits of the construction giant.
The receiver is trying to recoup losses on behalf of Carillion's creditors which are owed money in the wake of its collapse in January 2018 under a mountain of debt estimated at £7 billion.
KPMG was reportedly paid £29 million for conducting audits of Carillion's accounts over 19 years but creditors have claimed the listed group paid out £210 million in dividends despite racking up massive losses because it relied on these audits by KPMG. No terms of the settlement have been disclosed.
Jon Holt, chief executive of KPMG in the UK, said: "I am pleased that we have been able to resolve this claim.
"Carillion was an extreme and serious corporate failure and it is important that we all learn the lessons from its collapse."
Carillion was one of the largest construction groups in the country at the time of its collapse and counted a string of huge projects among its portfolio including the Royal Liverpool and Sandwell's Midland Metropolitan hospital, both of which were left in limbo at the time.
Around 3,000 jobs were lost and it was considered one of the worst failures in UK corporate history.
Last July, KPMG was fined £14.4 million over its reports to accounting regulator The Financial Reporting Council (FRC) related to its audit of Carillion and four of the firm's former staff were kicked out of the Institute of Chartered Accountants in England and Wales for between seven and ten years.
The fines related to dealings between KPMG and the FRC during routine inspections of the audit of Carillion's accounts for 2016 and those of London IT firm Regenersis for 2014.
Separately, The FRC is still investigating KPMG and former directors of Carillion about these audits and the 2016 accounts.
Mr Holt added that this investigation was an important part of learning lessons from the collapse and KPMG would continue to co-operate fully with it.
