The number of current and former shareholders in AIM-listed alternative business structure Quindell registering with a Liverpool law firm for a potential group action has doubled to over 500.
Colin Gibson, chief operating officer of Your Legal Friend, said he expected proceedings to be issued in the next few months, followed by an application for a group litigation order. Your Legal Friend is the consumer brand of Camps solicitors.
Mr Gibson said the planned litigation should not be seen not as one big negligence action but “a potential series of actions” relating to “different areas of misstatement” by the personal injury giant.
“The cases that will be clearest are where we can demonstrate that a misleading statement has been made and the shareholder has acquired the shares shortly afterwards, and incurred a loss,” Mr Gibson said.
“The position of those who continued to hold shares is more complicated. It may depend on what is an active decision to go on holding shares and what is a passive one.
“The process we are going through is pretty complex. We have developed a matrix of when people held or bought shares, and are comparing this with the statements made by Quindell.”
Mr Gibson said that under section 90A of the Financial Services and Markets Act 2000, shareholders had the right to compensation where they had relied on misleading information from the company.
He said that the statements made by Quindell had to be distributed by “recognised means”, which meant via the Stock Exchange or on the firm’s website.
He said a “cohort” of stronger cases had been discussed with junior counsel and the firm was looking to appoint senior counsel.
Mr Gibson said the fate of these cases did not depend on the release of an eagerly-awaited independent review of the business by PwC, or for the publication of Quindell’s annual report in the spring.
He added that the planned litigation against Quindell would not depend on the possible sale of its legal services division to Slater & Gordon.
“The fact that Quindell owns a legal business and one day decides to sell it in return for a sizeable pile of cash does not change anything. It may affect its ability to pay compensation, but it does not really make much difference”.
Quindell issued a statement this week denying reports that the talks with Slater & Gordon had ground to a halt.