Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Brewin sues Charles Stanley in High Court poaching row

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.

Brewin is claiming damages for loss of profit on any client monies that follow the team over to Charles Stanley, as well as damages from the defendants for breach of contract.

The Leicester office manages over £800 million and Brewin said if half of this amount moved to Charles Stanley, it would lose more than £2 million a year in revenue.

The writ also calls for ‘exemplary damages’ that would ensure Charles Stanley does not profit from hiring the team.

‘Charles Stanley can confirm that a High Court claim has been issued against it by Brewin Dolphin Limited relating to the recruitment of a number of individuals who joined Charles Stanley to establish its Leicester office. The claim will be vigorously resisted,’ the company said in a statement.

Stephen Ford, head of investment management at Brewin, said: ‘We will act to protect our business and our clients’ interests, which are paramount and where we have been advised that contractual obligations have been broken. We are not prepared to make any further comment while the matter is subject to court proceedings.’ 

Citywire TV
Citywire TV
Citywire TV
Play Where A-rated Pattullo is finding the best bond opportunities

Where A-rated Pattullo is finding the best bond opportunities

Henderson Global Investors head of retail fixed income explains how he is managing his fund against the surprise current monetary policy divergence.

1 Comment Play Taxicab Tenner: Allianz Global Investors' AA-rated Simon Gergel

Taxicab Tenner: Allianz Global Investors' AA-rated Simon Gergel

Our much anticpated new series is here! We hand a black cab driver a tenner and grill the manager of the 125-year Merchants trust until the meter runs out.    

Play Europe bulls, a retail boost and why a little inequality can be a good thing

Europe bulls, a retail boost and why a little inequality can be a good thing

This week’s Investment Pulse looks at whether investors should be bullish on Europe, the surprise rise in UK retail sales and if a little inequality is a good thing.

Your Business: Cover Star Club

Profile: meet the duo at the heart of Hargreave Hale's succession plan

Profile: meet the duo at the heart of Hargreave Hale's succession plan

For the first time in the company's history a non-Hargreave is now at the head of the north west broker and asset manager

Wealth Manager on Twitter