National firm Slater and Gordon today stepped into a High Court battle to settle one of the most contentious and talked-about mergers in legal history.
The firm is suing Watchstone Group (formerly known as Quindell) for the full £637m value of its 2015 acquisition – a purchase which was followed by a nosedive in its profits and the collapse of its parent company’s share price. For its part, Watchstone is countersuing for £63m, saying the acquisition was under-valued because of issues with disclosure in the build-up to the deal.
Watchstone, which is still listed on the London Stock Exchange, has said it expects the trial to last for nine weeks. The company has admitted publicly it has spent around £6.6m on legal costs fighting the case.
The acquisition of Quindell’s professional services division – effectively its entire legal department – was the most expensive ever seen in England and Wales.
Slater and Gordon issued its claim in June 2017 for breach of warranty and/or fraudulent misrepresentation for the whole amount paid. Watchstone has continued to say the allegations are ‘wholly without merit’.
Court papers have already revealed that Slater and Gordon spent £31.7m on the ‘most rigorous’ due diligence over five months before the merger. The acquisition was supposed to have brought in 90,000 RTA cases a year.
The legacy of Slater and Gordon’s rapid expansion, which saw acquisitions across the country, continues to be felt today. On Friday, the firm confirmed it had closed its office in Leeds, with around 25 fee earners, working in crime and personal injury, being made redundant. The decision comes less than a year after the firm had stated its commitment to retaining a presence in the city.
The closure followed a period of consultation and a review of the network of offices across the group. This review concluded that work can be consolidated in bigger offices such as Liverpool and Manchester, while upgrades in technology have reduced the need for physical sites.
A Slater and Gordon spokesperson said: ‘We have introduced new technology and processes that allow us to work more efficiently and provide a better experience for our customers. Consequently, we are closing our Leeds office and relocating the work to other locations.’
The firm has closed a number of offices across England and Wales since the takeover by new owners who have sought to reduce costs and make the business more efficient. These offices were largely a hangover from the previous administration which had acquired firms in a bid to become the best-known consumer legal brand in the country.
In 2017, plans to shut offices in Chester, Wrexham, Milton Keynes and Preston were confirmed. Last November, the Leeds office headcount was reduced when the firm decided to disband its noise-induced hearing loss team by the end of the year. At the time, a spokesperson said the firm remained ‘committed to our presence’ in Leeds and would relocate remaining staff to a new site.