LONDON: Watchstone Group plc has filed and served a claim against PricewaterhouseCoopers LLP (PwC) in the High Court, a news release said on Friday.
The claim against PwC is for damages or equitable compensation of £63 million plus exemplary damages, equitable compensation, interest and costs. Watchstone’s claim against PwC is for breach of contract and/or breach of confidence and/or breach of fiduciary duty and/or unlawful means conspiracy.
The claim arises from an unauthorised and illicit channel of communication between PwC, Watchstone’s trusted restructuring and technical accounting adviser at the time, and Greenhill & Co, a corporate finance adviser to Slater & Gordon (UK) 1 Limited (S&G), procured during the period of due diligence and negotiation relating to the £637 million disposal of the Professional Services Division (PSD) in 2015.
Watchstone claims that Greenhill established this back-channel with PwC by one or more secret meeting(s) between representatives of Greenhill and PwC, at which PwC unlawfully disclosed information pertaining to Watchstone which was, and which it knew to be, confidential.
This information was then factored into S&G’s tactics and strategy for the negotiations with Watchstone leading to the acquisition of the PSD. S&G thereby gained an unfair advantage in those negotiations, which it exploited in order to purchase the PSD at a lower price than it would otherwise have had to pay. This caused Watchstone to suffer significant loss.
Watchstone did not discover (and was not told of) the various breaches by PwC referred to above, and was therefore unaware that its confidential information had been provided to Greenhill and S&G until it received third party disclosure from Greenhill in the proceedings with S&G on 19 July 2019 almost three years after S&G’s claim was first threatened. PwC never informed Watchstone of the meeting or meetings, the disclosure or the breaches that occurred.
Even today, PwC continues to refuse to reveal the identity (other than to confirm that the person was male) of the PwC representative who met with and communicated with Greenhill. It has, however, confirmed that that individual attended a meeting on 15 January 2015 with Greenhill and that he was contacted by them on another occasion in February 2015 to seek to arrange a further meeting. Watchstone paid PwC in excess of £5m in fees in 2014 and 2015 for its independent review into, inter alia, Group accounting policies and cash generation. PwC had no role in respect of the disposal of the PSD.