The seemingly endless fallout from Slater and Gordon’s disastrous purchase of Quindell's professional service division looks set to go on, with another legal action underway.
Watchstone plc, formerly known as Quindell, told the London Stock Exchange on Friday that it had filed and served a claim against Big Four accountancy PricewaterhouseCoopers LLP (PwC) in the High Court.
The claim against PwC is for damages or equitable compensation of £63m plus exemplary damages, equitable compensation, interest and costs. Watchstone’s claim against PwC is for breach of contract and/or breach of confidence and/or breach of fiduciary duty and/or unlawful means conspiracy.
The claim arises from an alleged 'unauthorised and illicit' channel of communication between PwC, Watchstone’s former restructuring and technical accounting adviser, and Greenhill & Co, a corporate finance adviser to national firm Slater and Gordon, during the period of due diligence and negotiation when Quindell sold its professional services division for £637m in 2015.
In its statement, Watchstone claims that Greenhill established a back-channel with PwC by one or more secret meetings between representatives of Greenhill and PwC, at which the accountancy firm disclosed information which it knew to be confidential.
This information was then factored into Slater and Gordon’s tactics and strategy for the acquisition, and therefore the law firm gained an unfair advantage in these negotiations.
PwC said it denies the allegations and will vigorously defend this claim.
In October 2019, Watchstone settled High Court proceedings issued by Slater and Gordon from June 2017 relating to the sale of the division. The settlement included the unconditional withdrawal by Slater and Gordon of all of its claims or potential claims against the company relating to the historical sale. The company also agreed not to pursue its counterclaim against Slater and Gordon.
The settlement provided for £11m of the £50m being held in escrow to be released to Slater and Gordon, with the balance of £39m and all accrued interest from May 2015 being released to the company.
Watchstone shares rose sharply on the news and open at 65p today.