Listed legal services company Quindell says it has won its libel action against a market analyst that had questioned the accuracy of its financial statements.
Quindell issued libel proceedings in April this year against Gotham City Research after the US-based analyst published a critical report, prompting a sharp fall in Quindell’s share price.
Quindell, listed on the Alternative Investment Market (AIM), claims to be the world's largest publicly quoted law firm.
In a statement to the London Stock Exchange today, Quindell confirmed that the High Court granted permission in July for an out-of-jurisdiction claim form and particulars of claim to be served on Gotham in the US state of Delaware.
These were served on 29 July, but Gotham failed to provide either acknowledgement of service or a defence.
As a result, Quindell and fellow claimants including chairman Rob Terry, have now received judgment in their favour from the High Court, the statement said. The process of assessing damages will begin at the end of November.
Tony Bowers, senior independent director and vice-chairman of Quindell, said: ‘Whilst it is disappointing that Gotham has not been prepared to submit itself to the scrutiny of the English courts, we have consistently stated that we believe the Gotham publication was both defamatory and deliberately misrepresentative and it is pleasing to receive validation of our claim and success in this matter.
‘The company will continue to pursue actions of this type, where necessary, to protect its reputation and the best interests of its shareholders.’
The report caused the value of Quindell shares to drop by more than 50% and is estimated to have wiped around £1bn from the value of the company.
Gotham, which says it is a researcher for due diligence-based, special situation investing, has yet to comment.