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‘A clear cut case’ – Ex-KWM employees win £1m pay-out from employment tribunal

After being on the verge of accepting a six-figure sum last month, a group of 288 former King & Wood Mallesons (KWM) employees have been awarded over £1m by an employment tribunal to settle claims from the collapse of the firm’s European arm.

The ex-staffers received the compensation award this week (20 September) following the failure of KWM to properly engage in a formal redundancy consultation during its much-publicised European insolvency.

The pay-out represents a significant uplift in compensation for the claimant group, which had considered accepting a near-£800,000 settlement offer from the firm’s administrators made in August. Quantuma, KWM’s administrators, made the offer after conceding that a ‘technical breach’ had taken place during the required UK redundancy consultation period. The earlier proposed settlement constituted eight weeks’ pay, capped at £479 per week per person.

The claimants, however, rejected the settlement, taking the case to employment tribunal, which handed down its judgment this week.

The claimants were represented by Wokingham law firm Herrington Carmichael, with a team led by partner and head of employment Alistair McArthur. In a statement, McArthur thanked Quantuma ‘for being amenable and helpful throughout the process’ and described the case as ‘a very unfortunate situation for all involved’. McArthur went on to label the claim as ‘a clear cut legal case’ and stated the firm was ‘confident that the former employees had a strong case for compensation through the employment tribunal’.

The pay-out is the latest episode in the lengthy saga of KWM’s European collapse. The firm filed for administration in December 2016 with debts of over £30m after senior figures had left the firm in droves. It was the largest failure to ever hit the European legal market. The practice was largely made up of the legacy SJ Berwin practice, which merged with Asia-Pacific giant KWM in 2013. Despite the union, the firm remained structured as individual partnerships leaving the rest of KWM unaffected by the insolvency.

A report filed earlier this month by Quantuma at Companies House revealed the costs associated with the firm’s European administration, including CMS Cameron McKenna receiving a total of £826,740 for ‘assistance in attending to the complex legal issues which have arisen both in the pre and post-administration periods.’

Click here for the definitive account of the collapse of KWM (£)