Herbert Smith, Fountain Court and Five Paper Buildings have taken roles on a high-profile action against PricewaterhouseCoopers (PwC) that has seen the accounting giant fined £1.4m.

The proceedings were launched by the Accountancy & Actuarial Discipline Board (AADB) into the role of PwC's UK arm in not uncovering a failure by audit client JP Morgan to ringfence client money.

The sanction – the highest fine ever against a UK accountancy firm – was issued this week by an independent tribunal that adjudicates AADB investigations.

The failure, which related to billions of pounds of client money, had already seen JP Morgan handed a £33.3m fine by the Financial Services Authority (FSA).

Fountain Court head Timothy Dutton QC advised PwC alongside Herbert Smith dispute resolution of counsel Stephen Flaherty. Fountain Court's Simon Browne-Wilkinson QC acted for the AADB with counsel Tom Allen from Five Paper Buildings.

The case was launched after it came to light in 2009 that PwC had failed to notice that one of JP Morgan's UK divisions had not complied with FSA rules on the segregation of client money when it had audited its accounts between 2002 and 2008.

The error occurred at the bank after the integration of IT systems, following the merger between JP Morgan & Co and Chase Manhattan Corporation started in 2000. JP Morgan discovered the error in July 2009 and reported it to PwC and the FSA the same month, with the US bank incurring a £33.3m fine from the FSA in 2010.

The AADB had pushed for a much larger fine against PwC in the recent action due to the size of the accounting group. However, the tribunal judging the proceedings rejected this standard stating that "the relative profits of the client and the auditor are not appropriate measures of the penalty".