By Gabriel Princewill-
The former head of a now defunct London firm, is suing former members for almost £1.2m in profits allegedly lost because of their departure, it has emerged.
The legal action has been launched by Gregory Rollingson, former managing partner of Rollingsons Solicitors. Defendants yesterday sought to strike out elements of the claim.
The case between Rollingson and Hollingsworth & Ors, reveals serious allegations that in itself potentially brings the legal profession to disrepute. The Claimant has accused four defendants of committing various legal offences, including breaches of contract, breaches of fiduciary duty, misuse of confidential information, and economic torts.
The defendants allegedly left and procured each other and others to leave the Company to join the fifth defendant; competing with the Company through the Fifth Defendant; and otherwise acting so as to damage the Company.
The claimant alleged that they, or one or more of them, effectively took the Company’s Property and Family Departments to the Fifth Defendant; being another company which was to operate and then has operated a solicitors’ practice and of which the First and Second Defendants (at least) became directors and substantial shareholders.
The Claimant alleges that all this resulted in the Company generating substantial losses instead of substantial profits; and a claim is made for £1,157,000 foregone profits (although not for incurred losses) of the Company and, further and alternatively, an account of profits made by the First and Second Defendants.
Significant Profits
The allegation that the defendants – James Hollingsworth, Steven Gasser, Maya Bhatiani and Joanne Wheeler – caused the firm to miss out on significant profits when they left to join a fifth defendant, Laurus Law Limited, between 2016 and 2017 has caused stirs in legal circles.
The Claimant does not claim directly in his own right but as alleged assignee of the Company’s (alleged) claims (“the Claims”) against the Defendants, he alleging that he was assigned the Claims by Philip Lewis Armstrong and Philip John Watkins, the appointed administrators (“the Administrators”) of the Company
The court heard allegations that the four individuals, in conspiracy with Laurus Law, ‘committed various wrongs including breaches of contract, (in the case of [Hollingsworth and Gasser]) breaches of fiduciary duty, misuse of confidential information, and economic torts including by: themselves leaving and procuring each other and others to leave [Rollingsons].’
Among the allegation is that they, or one or more of them, effectively took Rollingsons’ property and family departments, resulting in the firm making substantial losses instead of profits.
Profitable
The claim sets out that the firm had been profitable, and had merger potential, for years leading up to 2016, with the family and property departments bringing in fees of more than £2.1m. This figure dropped to around £800,000 by 2018 after the defendants’ departure. The firm went into administration in 2018.
The defendants reject the claims, alleging that the firm was badly run, losing money and engaged in forced redundancies. They say their actions were unrelated to the eventual entry into administration which took place some time after they left, and that the firm was in severe financial difficulty and failing to pay its debts anyway.
The defendants sought to strike out a number of paragraphs from the particulars of claim. Following a two-day hearing in October, Master Dagnall struck out one paragraph, required three more to be altered, and refused to strike out or grant summary judgment in relation to a fifth.
Richard Leiper QC and Zac Sammour, instructed by Lewis Silkin LLP, appeared for the claimant; Adam Solomon QC, instructed by Brabners LLP, appeared for the first, second and fifth defendants.