The counterclaim seeks at least £63m in damages
Watchstone on Thursday filed a counterclaim against Slater and Gordon UK seeking at least £63m in damages.
The announcement was made by Watchstone after getting approval from the UK High Court to file the counterclaim, which alleges breach of confidence, inducing breach of contract, and unlawful means conspiracy.
Watchstone said that it recently discovered “an illicit back channel” it said was set up by Greenhill & Co, a corporate finance adviser to listed Australian law firm Slater and Gordon, when it was conducting due diligence and negotiation with Watchstone's then group restructuring and technical accounting adviser, PwC.
“Watchstone claims that at Slater & Gordon’s behest … its agent Greenhill & Co established a ‘back-channel’ with PwC, Watchstone’s trusted adviser, by a series of secret meetings … at which it unlawfully obtained information pertaining to Watchstone’s wider group which was, and which it knew to be, confidential,” Watchstone told shareholders.
Watchstone claimed that Slater and Gordon gained unfair advantage in negotiating the acquisition of the professional-services arm of Quindell by using the information it obtained through the channel, resulting in a lower purchase price.
Greenhill shared information about its work on the deal through a third-party disclosure on 19 July. Watchstone told the court that it had not been told by Slater and Gordon, including in its disclosure and witness statements in its lawsuit against the company, about the channel. Watchstone said it was unaware that its confidential information had been provided to Greenhill and Slater and Gordon until it received the disclosure, which was three years after Slater and Gordon first announced a suit against the company.
Slater and Gordon acquired the Quindell unit in 2015 for $1.3bn. Massive losses followed, including Slater and Gordon having to write off $880m for its UK business. A billion-dollar lawsuit followed.
Watchstone has not sued PwC or Greenhill.