Australian Firm to cease UK Operations

Australian International giants Slater & Gordon have confirmed their plan to cease all UK operations with a view to selling off UK holdings to prospective buyers. The announcement was made earlier this week and came as no great surprise to the legal sector in light of S&G’s reported financial difficulties emerging from 2015 onwards.

The Australian firm first entered the UK markets in 2012 after being granted a license by the Solicitors Regulation Authority (SRA) and their initial acquisition of UK firm Russell, Jones and Walker. S&G sought to develop their UK holdings and continued to acquire a number of long established firms, most notably, Pannone, Fentons and Walker Smith Way.

Since breaking into the UK Markets, S&G have centred their business around the Personal Injury market, providing legal advice in matters which include, Road Traffic Accidents, EL/PL and Clinical Negligence Claims. S&G also developed their business practices with a focus on Employment and general commercial matters.

After what could be considered a swift integration into the UK markets S&G began reporting financial losses from their UK offices, particularly due to the decline in the PI market. S&G sought to overcome this negative spell with further acquisitions, and in 2015 acquired the professional services division of Quindell Plc for £637 million.

What looked to be a prospective development only lead to further frustration and financial loss for the Australian firm due to alleged fraudulent misrepresentation surrounding the Quindell acquisition, which lead to the write off £879.5 million from the UK business. In an effort to recoup these losses S&G are currently seeking to bring a claim worth £600 million against Watchstone (the remainder of Quindell Plc) on grounds of fraudulent misrepresentation.

Following a further period of financial difficulty, in February 2016 S&G reported a further write off of £439 million in losses, the bulk of which was suffered from their UK holdings. In a final effort to rescue the company from impending Insolvency S&G’s lenders, New York based hedge fund Anchorage Capital, absorbed the majority of the firm’s debt and have undertaken a significant restructuring of the business which lead to the ousting of the Chief Executive Officer & board of Directors.

The Australian firm now hope to redevelop the business and plan to break off all UK holdings, which will be separated and transferred to a separate UK Holding Company wholly owned by S&G lenders. S&G have confirmed they are currently in negotiations with UK Insurance firm Berryman Lace Mawer to acquire S&G UK business services. With an impending £600 million legal battle with Watchstones in the coming months, the Australian firm will now enter into a difficult period of withdrawal from the UK legal market in hopes of redeveloping their remaining holdings.