Eversheds is being sued for £600,000 because its Cardiff office allegedly gave negligent advice.
The claim goes back to 1995 and has been issued by Welsh company Biotrace, which makes hygiene testing kits.
It centres on former Biotrace managing partner and chief executive Brian Levett, who was suspended and later sacked for upsetting retailer Marks & Spencer (M&S), with which Biotrace has a commercial relationship.
Prior to dismissing Levett, the Biotrace directors approached Eversheds’ Cardiff office for advice.
The national firm recommended that Biotrace should terminate his employment for breach of contract and deny him share options, which the company did.
But Levett then sued Biotrace in two separate actions, one in the High Court and one at an industrial tribunal. Biotrace settled in both cases, paying £350,000 for the High Court case and a further £12,500 for the tribunal.
But Biotrace is now turning its attention to Eversheds. It is suing for damages of £600,000 to cover the compensation paid to Levett as well as legal costs.
It claims the firm was in breach of contract, that it was negligent and that it failed to consider Levett’s service agreement properly.
It also claims that Eversheds failed to warn Biotrace that the termination would weaken the company’s position and that litigation would be likely.
In a statement, the firm says: “Eversheds declines liability for this claim, which is being defended by their solicitors Barlow Lyde & Gilbert.” The firm declined to comment further.
In 1995, a batch of sandwiches contaminated with salmonella was sent to M&S.
Levett then upset the retail giant by claiming the salmonella incident could have been avoided if M&S had used Biotrace’s equipment. Although the retailer’s supplier, Hillsdown subsidiary Henry Telfer, owned a Biotrace testing system, Levett claimed in a letter to M&S Food’s managing director that it had not been used on this occasion.
It is claimed that Levett also put an advert in a national newspaper for Biotrace’s products that alluded to the salmonella outbreak.
The Biotrace board felt that Levett had compromised the company’s relationship with M&S, and suspended him in November 1995. He was then dismissed after Biotrace sought advice from Eversheds.
Biotrace is claiming that the advice Eversheds gave amounted to unlawful dismissal as well as breach of contract.
Biotrace has a market capitalisation of £9.5m and is based in Bridgend, South Wales, with a subsidiary company in the US. It has distributors in a variety of countries worldwide.
CMS Cameron McKenna is representing Biotrace.