If successful, the lawsuit could see Slater & Gordon recover £50m of the purchase price for Quindell’s business, currently being held in escrow until 29 November. The Australian-listed firm has said that it is still ‘too early in the process’ to decide whether its claim against Watchstone will be launched in an Australian or UK court.

Catastrophic losses

Not long after Slater & Gordon acquired the business from Quindell for £673m last year, the Financial Conduct Authority (FCA) launched an investigation into Quindell’s profit figures which was eventually wrapped up to make way for a subsequent investigation by the Serious Fraud Office. Slater & Gordon has suffered devastating losses attached to the acquisition, including an A$879.5m impairment charge related to the deal which resulted in a first-half loss of A$958.3m for the listed firm. Slater & Gordon eventually reported an A$1 billion loss for the 2015/16 financial year, and is facing a class action lawsuit from its own shareholders over the timing of its disclosures to the market about the troubled transaction.

‘No bases’ for claim

Watchstone Group, which changed its name after the deal with Slater & Gordon, has defended the sale of Quindell’s professional services arm as ‘professional and transparent’, adding in an official statement that it does ‘not believe there are grounds for a claim to be brought and will defend [the claim] robustly.’ Slater & Gordon has not yet offered details of the legal basis for its claim against Watchstone

Sources: The Lawyer; Financial Times; Legal Week