Ann: FY16 Earnings Guidance-SGH.AX, page-161

"There is 50m pounds as insurance (escrow) if it underperforms as part of the acquisition deal.
If those success rates materialise it would help pay down a significant amount of debt, however it's a write off at this stage with no new info on it.
There is no recognition of it in WIP because there are no reliable accounting precedents to value it. The WIP is zero"...........

........not sure where you get your views from, Joe, but they're incorrect.

The acquisition of QPP's professional services division ('PSD') completed at the end of May 2015. As part of the terms QPP agreed to leave £50m of the £649m consideration in escrow for an agreed period. It was described thus:
"the Company has agreed to the placement of £50 million of the initial consideration into an escrow account for a period of up to eighteen months in respect of the customary warranties given to Slater and Gordon in the Sale and Purchase Agreement".

The £50m was specifically NOT in respect of NIHL claims, on which no warranties will have been given. It had been previously stated in a RNS issued by QPP on 30 March 2015:
"Quindell will receive further contingent cash consideration payable in respect of the future settlement of its clients' NIHL cases. As at 29 March 2015, the Company was acting for clients in respect of approximately 53,000 NIHL cases ("Deferred Consideration Cases") and Quindell will be entitled to a 50 per cent share of net fees (after the deduction of certain agreed costs) in respect of the settlement of such cases in the period until 30 June 2017 (although there can be no guarantee that such cases will settle successfully). There will also be a final payment based on the estimate of 50 per cent of the net present value of any unresolved Deferred Consideration Cases as at 30 June 2017...........
.............In view of the relatively small numbers of cases that the Company has successfully settled to date, the Directors are unable to assess with certainty the amount of net fees that might be generated by such NIHL cases. However, the Directors believe that, based on certain assumptions, the Deferred Consideration Cases could generate a significant amount of additional cash consideration. Therefore, the Directors believe that it was important to provide Shareholders with a mechanism to benefit further from the Deferred Consideration Cases".
http://www.investegate.co.uk/quinde...sional-services-division/201503300705008060I/

It is pie in the sky for anyone to suggest there will be claims against the warranty escrow in the event of a failure of revenue from NIHL cases to materialise. No consideration was paid for the 53k cases and no warranties were given, so there can be no such claim.

I am also not sure how you conclude:"There is no recognition of it in WIP because there are no reliable accounting precedents to value it. The WIP is zero".

All work done on the 53k (and any other) NIHL cases since they have been in SGH's ownership will have been treated by SGH in the same way as work done on all other cases not involving HL and will have been subject to the same reviews of booked cost vs recoverability. We don't yet know (and might not find out) what what specific value was attributed to HIHL WIP at 30 June 2016. But we do know a lot of time was spent on the cases in H1 - whether the cost of this is recoverable is another matter but the time wasn't necessarily all written off for the reasons you say.

Hope the above promotes a better understanding of the position from an accounting and legal perspective.