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Brewin sues Charles Stanley in High Court poaching row

by James Phillipps on Mar 06, 2014 at 10:52

Brewin sues Charles Stanley in High Court poaching row

A High Court battle has broken out between Brewin Dolphin and Charles Stanley, featuring allegations of a cover up, secret ‘recruiting sergeants’ and clandestine negotiations to prise 18 people from the Leicester office of Brewin over to Charles Stanley.

Brewin is also suing six former senior employees from the office, including ex-branch head Ed Cufflin, four other divisional directors and its business development manager.

The six quit Brewin last March to join Charles Stanley to launch a Leicester office for the company. Twelve more Brewin staff followed them over the next month.

The nine-point writ, seen by Wealth Manager, alleges that Brewin’s former employees breached their contracts and conspired with Charles Stanley to cause losses to Brewin’s business ‘by unlawful means’.

Charles Stanley has denied the claims and said it will ‘vigorously resist’ them.

The claims centre on the terms of Brewin’s employment contracts. These state that all current employees must ‘promote the interests and welfare… of the group’ and ‘immediately inform the board’ if they know senior staff have been approached by rival companies.

The writ claims that in pre-action email correspondence with Brewin’s solicitors, Cufflin said he had been in dialogue with Charles Stanley since 2010. The conversations became ‘more focused’ in 2012 and Cufflin admitted he had held ‘informal discussions’ with his colleagues who had also formally been offered terms by Charles Stanley. 

Brewin argues this was in breach of contract, as well as their fiduciary and confidence obligations. The firm also accused Charles Stanley of inducing this. Furthermore, Brewin alleges the six acted as ‘recruiting sergeants’, using their influence to help in the hiring of the 12 other team members. The 12 claimed they had switched after applying to a Charles Stanley job advert, but Brewin branded this ‘incredible’ and a ‘cover up’, given the proximity of the departures.

It said the six individuals conspired with Charles Stanley to co-ordinate the resignations of the team, making it difficult for Brewin to respond.

The writ alleges the defendants ‘intended that the execution of the plan would materially damage the business of the Leicester office’, enabling Charles Stanley to pick off Brewin’s clients for no cost.

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