Embattled law firm in hot water

SLATER and Gordon is facing more legal action, with one of its shareholders planning proceedings against the troubled law firm.

Slater yesterday said it received a letter stating Babscay intends to take action over allegations of misleading representations in the company’s 2013, 2014 and 2015 financial statements.

The law firm is already facing two potential class actions from shareholders whose stakes have plummeted in value in the wake of a disastrous foray into the UK.

Slater, in a statement to the Australian Securities Exchange, said the full details of Babscay’s claim were not included in the letter from Johnson Winter & Slattery Lawyers.

Babscay is not listed among Slater’s 20 largest stakeholders.

Slater’s market value has fallen from $2.8 billion in April 2015 to just $32.3 million after its $1.2 billion acquisition of Quindell’s professional services division in the UK.

At 9.4c, its shares are valued at just 1 per cent of the $8.07 they were worth a little over two years ago.

Slater last month announced plans for a $1 billion claim for fraud against the company from which it acquired the UK business, now known as Watchstone, which dragged it to a $1 billion loss in 2015-16 and to the brink of bankruptcy.

But Slater is itself facing allegations, with rival firm Maurice Blackburn leading a class action representing thousands of shareholders over the disclosure of financial information between March 2015 and February 2016.

ACA Lawyers is also investigating a potential class action against the firm.