Watchstone launches legal riposte to Slater & Gordon

WATCHSTONE, the company that emerged from scandal-hit Quindell, has raised the stakes in a legal battle with Slater & Gordon by launching a counterclaim.

It accuses the law firm of gaining an unfair advantage in negotiations to buy its professional services division in 2015 by improperly obtaining confidential information from its advisers at PWC.

The saga centres on a row over the £637m sale in 2015 by Aim-listed insurance firm Watchstone, as Quindell is now known, to Australian-listed law firm Slater & Gordon of its ill-fated division, which specialised in personal injury claims.

The law firm, which took a £486m writedown on the deal in 2016, sued Watchstone in 2017, alleging that the British company misled it over the prospects of the personal injury cases on the books of its professional services unit.

The High Court has granted Watchstone permission to file a £63m claim of its own after the company discovered evidence suggesting that the law firm’s advisers had “unlawfully obtained information pertaining to Watchstone’s wider group which was, and which it knew to be, confidential” while preparing its defence to the Slater & Gordon lawsuit.

It claims the law firm gained “an unfair advantage in negotiations, which it exploited in order to purchase the [business] at a lower price”.

The claims are expected to be heard together at a hearing in October.

Watchstone alleged that its confidential information was passed to Greenhill, Slater & Gordon’s bankers at the time, after it “established a ‘backchannel’ with PWC … by a series of secret meetings between representatives of Greenhill and PWC”.

PWC had advised Watchstone on a restructuring in 2014 and 2015 after its business ran into difficulty.

Slater & Gordon declined to comment. PWC and Greenhills, neither of which is a party to the legal proceedings, also did not comment.

Slater & Gordon shares were trading at A$1.50 yesterday, having been worth almost A$8 before the 2015 deal.