Slater & Gordon has since 2017 been claiming against Watchstone to recoup the whole £637m it paid for the group’s professional services division in 2015
Watchstone, formerly Quindell, has filed a £63m counterclaim against Slater & Gordon (S&G) over the law firm’s conduct in acquiring the group’s professional services division in 2015.
The counterclaim accuses S&G of using an ‘illicit back channel’ to find out confidential information about Watchstone’s wider business which it used to gain an unfair advantage in the acquisition negotiations.
Watchstone claims S&G’s corporate finance adviser Greenhill & Co established a ‘back channel’ with Watchstone’s adviser PwC and held a series of secret meetings in the confidential information was passed on.
It claims that ‘S&G then factored that information into its tactics and strategy for the negotiations with Watchstone leading to the action.’
This, it is claimed, allowed S&G to purchase the professional services division at a lower price than it would otherwise have had to pay.
S&G and Watchstone have been in a long-running legal dispute since June 2017 over S&G’s £637m acquisition.
The deal had disastrous ramifications for S&G, posting a $958m loss for the six months ending 31 December 2015. The loss was primarily attributed to a write-down on the deal and the law firm has been seeking to recoup the whole sum paid through the courts.
Permission was granted by the High Court for Watchstone to file the counterclaim on Wednesday.
Watchstone claims it only discovered the ‘back-channel’ through a third-party disclosure from Greenhill in July this year.
The counterclaim is due to be heard alongside S&G’s claim against Watchstone at a court trial starting in October.
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