PwC has been accused of a “surprising breach” of its skilled duties in a £63mn lawsuit by its former consumer Quindell, which alleged that the Huge 4 consultancy deprived it throughout deal negotiations by leaking confidential data.

Quindell, as soon as valued at £2.7bn, claimed {that a} senior PwC companion had divulged commercially delicate details about its monetary place and deal technique to an funding banker in 2015.

The software program group, now referred to as Watchstone, stated that funding financial institution Greenhill & Co then shared the knowledge with its consumer Slater and Gordon, leading to it gaining leverage to submit a decrease bid for a part of Quindell’s enterprise.

PwC denied legal responsibility on the primary day of a Excessive Court docket trial in London that’s anticipated to run till mid-February.

On Thursday, the court docket was informed that starting in 2014, PwC had been paid £5mn to conduct “venture Goldfish”, a evaluate into Quindell’s funds, and provide restructuring recommendation following detrimental publicity concerning the insurance coverage group’s accounting practices.

“It’s onerous to consider a extra necessary or delicate task for PwC than this,” stated Tim Lord KC for Watchstone. 

On the time, Quindell was making an attempt to promote its skilled companies division. It bought the enterprise to Australian legislation agency Slater and Gordon for about £637mn in 2015.

Watchstone’s case centres on what it calls a “secret assembly” between Ian Green, who was then PwC’s UK head of restructuring and dealing on venture Goldfish, and a banker from Greenhill, which was advising Slater and Gordon on its bid.

The court docket was informed that following the meeting, the banker had despatched an e mail to colleagues outlining what Inexperienced had informed him, together with that the insurance coverage group would run out of money in “mid-2015”. PwC denies that the be aware is an correct account of the assembly.

The main points allegedly disclosed had been the kind of data that “would possible transfer the dial” in worth negotiations, Lord stated.

Inexperienced’s assembly with the Greenhill banker had given the financial institution and its consumer Slater and Gordon an “inside monitor” and an “authenticated inside [the] tent view” of Quindell’s enterprise handing it leverage to submit a decrease bid than it in any other case would have executed, he stated.

He rejected Inexperienced’s proof that he had been “ambushed” by the Greenhill banker. Inexperienced may and may have stated “[I] can’t discuss Quindell, let’s discuss concerning the rugby”, stated Lord. Inexperienced is predicted to look as a witness subsequent week.

PwC denied conspiring with Greenhill or Slater and Gordon. It stated it didn’t breach its responsibility of confidence or skilled obligations in the direction of Quindell.

It argued that Inexperienced didn’t disclose confidential data to Greenhill, and even when he had executed so there was no proof that the funding financial institution had then shared this with Slater and Gordon.

In written arguments, it stated “the alleged breach of responsibility had no impact in any way on the worth for which Quindell was keen to promote . . . or on the worth which [Slater and Gordon] supplied to pay.”

Richard Handyside KC for PwC stated paperwork from the time confirmed Quindell’s advisers informed the corporate Slater & Gordon had supplied a “superb worth”. 

PwC has in flip claimed that if it loses the case, Slater and Gordon needs to be held liable for a portion of the damages.

In written submissions at Thursday’s listening to, Slater and Gordon stated the deal had been “financially catastrophic” for it, with goodwill of £558mn in the end written off. There was no proof that the assembly between Greenhill and PwC influenced the deal and “the proof factors clearly on the contrary”, it stated.

Slater and Gordon can be insulated from any findings towards it as a result of Watchstone has indemnified the legislation agency towards any monetary legal responsibility they might face on account of its declare towards PwC.

The indemnity was a part of a 2019 settlement of an earlier lawsuit underneath which Watchstone paid £11mn to Slater and Gordon, which had sued it for £637mn alleging breaches of guarantee and fraudulent misrepresentation over the deal. Watchstone had launched a counterclaim after the small print of the “secret assembly” emerged.

The court docket case is more likely to be among the many ultimate episodes in Quindell’s downfall, which started with a shortseller assault and a subsequent share suspension in 2015, adopted by a Monetary Conduct Authority investigation. The corporate later restated its accounts by a whole bunch of thousands and thousands of kilos to rectify “aggressive” accounting practices.

It subsequently bought off its buying and selling companies and is now searching for payouts in plenty of court docket instances and to return the money to shareholders. In November it settled a negligence claim towards its former auditor KPMG for £5mn.