The acrimonious dispute between Collins Stewart and its former employee, James Middleweek, who alleged that the stockbroker was guilty of insider dealing, share ramping and biased research, will be fought out in the High Court, it was decided yesterday.
The case has already become extremely high profile after details of the dispute emerged in August, wiping nearly a quarter of the value off Collins Stewart's shares.
The Financial Services Authority is also looking into Mr Middleweek's allegations that the independent stockbroker broke a host of City regulations.
At an initial legal hearing yesterday, it was ruled that the case should be heard at the High Court, rather than at an employment tribunal. The case will come to court next year, possibly in May, although the date may be pushed back until the autumn.
The ruling means Mr Middleweek will probably not be able to pursue his claim under the recent whistleblower legislation, which can only be used at employment tribunals.
Mr Middleweek's side had pressed for the case to go to a tribunal, as the whistleblower laws can award unlimited damages to individuals who are found to have lost their jobs unfairly after unveiling the wrongdoing of their employers.
Mr Middleweek was sacked on 9 July, after Collins Stewart alleged that through his lawyer he had tried to blackmail the company by offering not to send a report containing his charges to the FSA in return for receiving £2.4m in compensation.
Collins Stewart, which denies the allegations, had in contrast lobbied for the dispute to go to the High Court. Christopher Jeans QC, from 11 King's Bench Walk chambers, acting for Collins Stewart, said the move was a "no brainer" due to the "seriousness of the allegations".
The Crown Prosecution Service has decided that Mr Middleweek and his lawyer, Dale Langley, had no case to answer on the blackmail charge. But Collins Stewart is still using the accusation as justification for why Mr Middleweek was sacked.
As a result, Mr Jeans argued, the case ought to be heard at the High Court where judges have experience of trying criminal cases.
Depending on the outcome of the High Court case, Mr Middleweek could still try to take his case to a tribunal, though such a move would be unusual. Alternatively, the two sides may settle the dispute out of court to avoid any more damaging allegations being aired publicly.
Both sides already face hefty bills in legal fees and taking the case to the High Court will increase the costs dramatically. This could be very bad news for whoever loses the case, as the High Court can force the unsuccessful party to pay both sides' legal fees. If either party pulls out before the case goes to court, it would also have to foot the bill for the other side's legal fees.Reuse content