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Quindell saga rumbles on with claim against PwC

Slater & Gordon: Allegations of secret meetings

The company formerly known as Quindell has served a £63m claim against accountancy firm PwC for allegedly using confidential information to reduce the amount Slater & Gordon (S&G) paid to buy its professional services division (PSD).

Watchstone PLC’s claim against PwC is also seeking exemplary damages for breach of contract and/or breach of confidence and/or breach of fiduciary duty and/or unlawful means conspiracy.

It alleges that Greenhill & Co, S&G’s corporate finance adviser, established a “back channel” with PwC, which was Quindell’s restructuring and technical accounting adviser at the time, during the period of due diligence and negotiation relating to the £637m disposal of the PSD in 2015.

Watchstone claims that, during secret meetings, PwC unlawfully disclosed confidential information which was factored into S&G’s tactics and strategy.

It says this meant the law firm managed to buy the PSD at a lower price than it would otherwise have had to pay.

The allegations first surfaced a year ago [1], when Watchstone said it became aware of the meetings after receiving third-party disclosure from Greenhill in the proceedings S&G brought over the deal.

Mr Justice Bryan found [2] the evidence supporting the counterclaim easily passed the threshold for allowing it, but the main claim settled [3] in October on the eve of trial for just £11m, or 1.7% of the £637m claim.

Watchstone has now decided to pursue PwC in a standalone claim.

In a statement to the stock exchange on Friday, Watchstone said: “Even today, PwC continues to refuse to reveal the identity (other than to confirm that the person was male) of the PwC representative (referred to in contemporaneous emails as the ‘Head of PwC Restructuring’) who met with and communicated with Greenhill.

“It has, however, confirmed that that individual attended a meeting on 15 January 2015 with Greenhill and that he was contacted by them on another occasion in February 2015 to seek to arrange a further meeting.

“Watchstone paid PwC in excess of £5m in fees in 2014 and 2015 for its independent review into, inter alia, group accounting policies and cash generation. PwC had no role in respect of the disposal of the PSD.”

A PwC spokesman said: “We deny these allegations and will vigorously defend this claim. It would be inappropriate to comment further on an ongoing legal matter.”