Advisers in court over 'poaching' contract clause

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Advisers in court over 'poaching' contract clause

Financial advice firm Affinity is taking some of its former advisers to court over a contractual dispute in a case that could involve up to 22 of them and affect many more.

The case in the High Court relates to a clause on the advisers’ contracts preventing them from soliciting business from the company’s clients.

Under their contract advisers could not, within a year of the agreement being terminated, solicit or canvass the custom of Affinity’s clients or any potential clients.

Affinity is alleging that the advisers broke these restrictions by approaching the company's clients, a spokesman said.

Nor could they employ, offer to employ or enter into partnership with one of the company’s “restricted representatives”.

Andrew Ferguson, Juan Moreno, Darran Jackson, Adrian Peacock and Wayne Duffin are being pursued for damages by Affinity because of alleged breaches of this covenant.

Affinity is withholding monies owed to the defendants and others while the case proceeds.

At a hearing at the Royal Courts of Justice, the two parties agreed that a hearing will cover whether the covenants were enforceable, whether they were breached and the adequacy of the damages.

Barrister Chris Quinn, acting for the former Affinity advisers, said there were a further 22 advisers interested in joining the case.

He said: “Each of them wants to secure a finding that the restrictive covenants are unenforceable.

“Each wants to be in a position to influence the course of these proceedings by being in a position to instruct solicitors and counsel who are acting for the five defendants.

“Some may even have a far greater financial interest in the outcome of the proceedings than those five.

“Further all but one of the 22 are now having monies due to them withheld by the claimant as well.”

However deputy High Court judge Martin Chamberlain dismissed broadening the claim out further, saying there was no general obligation on a claimant to include every person who is or may be affected by the issues determined by a claim.

Until recently, Affinity's advice has been provided through self-employed advisers operating under consultancy agreements.

But on 11 May Affinity’s parent company Farleigh was purchased by Wealth at Work.

Wealth at Work's advice was delivered through employees, rather than self-employed advisers and it decided Farleigh's advice should also be delivered in the same way.

It offered contracts of employment to some of Farleigh's advisers, but not others.

The five defendants either were not offered or declined to accept a contract of employment and their consultancy agreements were terminated with effect from 31 July.