The saga of Slater and Gordon’s (S&G) ill-fated Quindell acquisition is set to intensify with the national firm’s £637m claim headed to court in October.
The case against Watchstone, formerly Quindell, sees S&G seeking to recoup the cost of acquiring the professional services division in 2015. S&G issued its claim in June 2017 for breach of warranty and/or fraudulent misrepresentation for the whole amount paid.
Watchstone said in a statement to the London Stock Exchange yesterday (3 June) that a trial was expected to start in October. Its legal costs have risen to £8.2m, reflecting a ‘determination to robustly defend the action.’
It added: ‘Our position remains that Slater and Gordon’s allegations of deceit and the associated breach of warranty claim are wholly without merit and should never have been advanced.’
The development is the latest in an ongoing dispute between the parties. In June of last year, the Solicitors Regulation Authority hit S&G with a £80,000 financial penalty for disclosing confidential client information in relation to the buyout. KPMG was also fined £3.15m after admitting to misconduct in handling the financial statements of Quindell.
The turbulent relationship between S&G and Quindell began shortly after the acquisition, when S&G began running into financial difficulties, posting a $958m loss for the six months ending 31 December 2015. The loss was primarily due to a considerable write-down on the Quindell deal, and S&G later saw its share price plummet and an exodus of senior management.
Watchstone told the stock exchange that £50m of the sale consideration is currently retained in a joint escrow account until a settlement is reached or the claim withdrawn.
For more on Slater and Gordon’s rise and fall, read ‘The Icarus Syndrome’ (£).