Terry Smith settles with former employee Middleweek

Collins Stewart Tullett, the stockbroker and investment bank, has unexpectedly headed off its forthcoming courtroom clash with James Middleweek, its former employee, as both parties agreed to withdraw their claims against each other and pay their own costs.

Collins Stewart Tullett, the stockbroker and investment bank, has unexpectedly headed off its forthcoming courtroom clash with James Middleweek, its former employee, as both parties agreed to withdraw their claims against each other and pay their own costs.

In a joint statement, issued yesterday, the parties said that no money had changed hands as part of the settlement.

However, Mr Middleweek added that he would be joining Collins Stewart in suing his former lawyer, Dale Langley. While Collins Stewart intends to sue Mr Langley for defamation, Mr Middleweek is to bring charges of professional negligence against him as well as his former barrister Michael Duggan, arguing that they acted without his consent. Jeremy Benjamin, a former colleague of Mr Middleweek, has already settled with Collins Stewart, after admitting to defaming the company.

Collins Stewart also reiterated its intent to press ahead with its case against the Financial Times, which it alleges libelled the company and was responsible for the sudden sharp drop in its share price when it printed the Middleweek story last year. The saga began last summer when Mr Middleweek accused his former employer of insider dealing, forwarding a dossier of evidence to the Financial Services Authority once he had been dismissed from his job. The FSA has since investigated the allegations and cleared Collins Stewart.

Commenting on the settlement, Terry Smith, the chief executive of Collins Stewart, said: "The FSA said there was no case to answer, Middleweek has withdrawn his case, his mate Jeremy Benjamin has admitted defaming us by publicising these accusations and we're told we have a good case against his former lawyer. I would like to think that a normal person would ... draw the obvious conclusions. We got a right old kicking at the time ... a real media frenzy. Someone at the Mail on Sunday even got an award for this nonsense. Now all the allegations have been withdrawn."

In a statement, Mr Middleweek's lawyers, The Simpkins Partnership, said: "James Middleweek has had a difficult 18 months.... However, there remains to be resolved his claims against his former lawyers."

Collins Stewart shares fell 2.7 per cent to 395.5p yesterday, giving it a market value of £753m.