Liverpool-based law firm Your Legal Friend, formerly known as Camps Solicitors, has launched a shareholder group action against Quindell under the Financial Services and Markets Act 2000 (FSMA), following the £312m swing from profit to loss in its professional services division (PSD).
In a statement, Quindell, which is currently being investigated by the Serious Fraud Office as well as undergoing an independent review by PwC, said it had received a ‘Notice of Intended Claim’ from a law firm suggesting it intends to commence an action against the Company.
Quindell added: ‘whilst the company is not in a position to verify the assertions in the notice (as no claim has been received as yet), the notice estimates the value of the potential claims against the company to be a maximum value of approximately £9m before costs (if awarded).
There can be no guarantee that other claims will not be made against the company and, in particular, the claimant firm details that it has been approached, but not retained by other potential claimants who together, it asserts, would have a claim of a maximum value of a further £9m.’
In a claim update letter published on My Legal Friend’s website the firm said it had been contacted by around 500 potential claimants, with the clearest route in most cases ‘likely to be a claim against Quindell PLC itself, under section 90A of the FSMA 2000.’
My Legal Friend said it would wait for additional evidence from the PwC report on accounting policies and related matters, the 2014 annual report and asset or business disposals currently being considered by Quindell – before proceeding.
Quindell, which grew through a spate of legal provider acquisitions, brought in PwC in December 2014 to carry out an independent review, evaluating the group’s main accounting policies and cash generation expectations for 2015. Following the review it had identified certain accounting policies which ‘were largely acceptable but were at the aggressive end of acceptable practice’.
The PSD, which mostly handles personal injury cases but also includes marketing and motor services, employs around 1,400 staff, and operates under a range of brands including Silverbeck Rymer, Pinto Potts and The Compensation Lawyers.