02 July 2018

Australian firm picks over the bones, while UK regulator hits S&G with fine

Troubled Slater & Gordon has Adelaide office taken over by Johnston Withers, while in UK the SRA hands out £80,000 penalty.

South Australian MSI global alliance law firm Johnston Withers has taken over the Adelaide office of troubled ASX-listed multinational Slater and Gordon (S&G). The tie-up is a boost for the Adelaide firm, but is another blow to S&G’s reputation, a firm founded in Australia in 1935 and boasted on its website ‘no matter where you are in Australia, there’s a Slater and Gordon office close by.’

Bucking the trend

Slater and Gordon opened an Adelaide office in 2004 to pursue local asbestos-related compensation cases, and in 2007 became the world’s first listed law firm. However, its fortunes took a turn for the worse in 2015 with a disastrous $1.3 billion acquisition of Quindell’s professional services arm in the UK. This deal beings the number of Johnston Withers staff to close to 60, with six Slater and Gordon lawyers and support staff retained as part of the combined business, continuing to operate from their current offices on South Terrace. Johnston Withers Managing Director, Andrew Mitchard said the deal followed last year’s acquisition of Murray Bridge conveyancing firm Marshall Conveyancing Group. ‘The benefit of bringing in Slaters, being strong in personal injury work, is that it really bolsters a traditional area for Johnston Withers and boosts our footprint with a lot of continuity.’ He added, ‘a lot of bigger commercial firms are national affiliations and I think with this one it's going the other way it's certainly going against the trend.’

Disclosure breach

While other firms pick at the bones, S&G has been fined £80,000 for a Quindell disclosure breach involving more than 7,000 files. The Solicitors Regulation Authority (SRA) imposed a £40,000 financial penalty on both S&G and Quindell Legal Services, now Slater Gordon Solutions, for disclosing un-redacted confidential information and documents from 7,087 client matter files to other firms. The pair were also ordered to pay the SRA’s costs of £26,000. According to the SRA, the breaches took place between December 2014 and February 2015, shortly before S&G’s troublesome £637m acquisition of Quindell’s professional services division. A spokesperson for S&G said ‘It is important to stress the SRA concluded there was no evidence that clients’ data was released outside of firms regulated by the SRA. However, we accept the SRA’s conclusion that a breach took place in relation to the due diligence process during this complex business transaction.’