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Firm sues former lawyers for causing its financial failure

High Court: Allegations contested

A claim by a law firm owner who alleges that the departure of four lawyers to another practice caused his firm’s administration has come out into the open in the High Court.

Greg Rollingson’s action was detailed in a ruling by Master Dagnall [1] over an application by the four lawyers and the firm they joined, London private client firm Laurus Law, to strike out parts of the particulars of claim.

The group are James Hollingsworth, Laurus’s chief executive, head of family Steven Gasser, head of residential property Joanne Wheeler, and Maya Bhatiani, the former head of family who has since moved on. They reject the allegations.

Mr Hollingsworth, who had been head of property at Rollingsons, left in September 2016 and the other three joined him at Laurus in early 2017, effectively taking its property and family departments with them.

Rollingsons went into administration in 2018 and was bought by Taylor Rose TTKW, where Mr Rollingson is now a consultant.

Master Dagnall recorded that Mr Rollingson alleges as assignee of the firm’s causes of action that the group “committed various wrongs” including breaches of contract, (in the case of Mr Hollingsworth and Mr Gasser) breaches of fiduciary duty, and misuse of confidential information.

He also claims for economic torts including leaving and procuring each other and others to leave, competing with Rollingsons, “and otherwise acting so as to damage” the firm.

The solicitor alleges that all this resulted in Rollingsons generating “substantial losses instead of substantial profits”.

He is seeking £1.2m in foregone profits and, further and alternatively, an account of profits made by Mr Hollingsworth and Mr Gasser as directors of Laurus.

He says that, in the financial year ending 31 March 2017, Rollingsons’ turnover was £3.1m, of which £1.2m and £514,000 came from the property and family departments respectively.

In the following financial year, the firm’s turnover fell to £2.9m, with the property department generating £574,000 and the family department £248,000.

The defendants argued that Rollingsons was badly run, losing money and engaging in forced redundancies, and that their actions were unrelated to the eventual entry into administration. Mr Hollingsworth and Mr Gasser say they only acted after they left the firm.

Master Dagnall rejected the applications to strike out three paragraphs and one sub-paragraph of the 123-paragraph particulars – but required three of them to be altered – and struck out one of them.