Slater & Gordon: Trial set for October
Slater & Gordon (S&G) is facing a multi-million pound counterclaim for allegedly using confidential information to reduce the amount it paid to buy Quindell’s professional services division (PSD).
The trial of S&G’s claim for breach of warranty and/or fraudulent misrepresentation over its £637m acquisition of the PSD is set for October.
But Watchstone Group PLC – as Quindell is now known – announced today to the stock exchange that the High Court has granted permission for it to serve and file and amended defence and counterclaim.
The counterclaim is currently for damages of at least £63m plus exemplary damages, interest and costs for breach of confidence, inducing breach of contract, and unlawful means conspiracy.
Watchstone claims that “at S&G’s behest and/or on its behalf and/or with its knowledge and authorisation and/or ratification”, Greenhill & Co – a corporate finance adviser to the law firm – established a “back-channel” with PwC, which was Watchstone’s group restructuring and technical accounting adviser.
It says that, through a series of “secret meetings” between representatives of Greenhill and PwC, S&G “unlawfully obtained information pertaining to Watchstone’s wider group which was, and which it knew to be, confidential”.
It continues: “S&G (and Greenhill on its behalf) then factored that information into its tactics and strategy for the negotiations with Watchstone leading to the acquisition of the PSD which is the subject of these proceedings, thereby gaining an unfair advantage in those negotiations, which it exploited in order to purchase the PSD at a lower price than it would otherwise have had to pay. S&G thereby planned to, and did cause, Watchstone to suffer significant loss.”
Today’s announcement said that Watchstone only discovered this information last month when it received third-party disclosure from Greenhill as part of the S&G proceedings.
It said Mr Justice Bryan yesterday rejected S&G’s submission that Watchstone should not be permitted to amend its defence or to bring the counterclaim.
“The judge also rejected S&G’s request that, even if the counterclaim was permitted, it should be stayed pending the determination of the trial.
“The judge ordered that Watchstone’s claims in relation to the back channel, including its counterclaim, are to be heard at the same time as the trial of S&G’s claims starting on 21 October 2019.”
S&G and PwC had no comment. We have approached Greenhill for comment.