Accountant sues law firm after losing his job over debt

A FORMER KPMG partner has filed a £22m legal claim against Herbert Smith Freehills arguing that he lost his job because the law firm tipped off his employer about debts he had built up investing in ski chalets.

Graham Martin is reportedly accusing Herbert Smith of choosing to “please and procure favour” with KPMG after it passed on details over his risk of bankruptcy.

Mr Martin hired Herbert Smith in the summer of 2017 to fight a legal claim by lender Creditforce, which had been suing him for debts of £3.3m and which secured a freezing order against him. He had borrowed the money to develop three ski chalets.

Mr Martin claims Herbert Smith told KPMG Singapore about the debt issues, which he had been waiting to do until he reached a settlement with the lender. He said that after Herbert Smith disclosed the issues he was called to a series of meetings with management and later lost his leadership positions.

He resigned from the company in February 2018 and was declared bankrupt in June that year. Mr Martin argues that he could have stayed in his job if he had been the one to tell KPMG about his financial troubles. He had worked at KPMG since 2010, and had been a restructuring leader for four years.

KPMG is a client of Herbert Smith. Mr Martin claims this was why it disclosed the debt issues “rather than comply with its duty of loyalty” to him.

Mr Martin has accused Herbert Smith of breach of fiduciary duty, negligence and breach of confidence. Herbert Smith is expected to lay out its defence next month. In the filings, Mr Martin suggested Herbert Smith would claim its partner John Corrie had explicit consent to tell KPMG it was representing him. Mr Corrie is not named as a defendant.

Herbert Smith did not immediately respond to requests for comment, but told the Financial Times, which first reported the story: “Mr Martin’s claim has no merit and the firm will defend it vigorously.” KPMG did not comment. Mr Martin did not comment.