FrontRow Legal secures £1 million win in High Court

FrontRow Legal secures £1 million win in High Court

Leeds law firm FrontRow Legal has won a £1 million High Court battle for its Huddersfield employment agency client.

Keystone Healthcare, which provides nursing recruitment to the NHS across the UK, discovered that former director and shareholder Colin Parr was behind a scam that saw a percentage of agency workers’ income deposited into a bogus account belonging to him and former IT consultant Mark Reynard.

Keystone appointed FrontRow Legal when the payroll fraud was discovered.

The scam had been running since April 2014. Parr voluntarily left Keystone in September 2014, after receiving a £1.2 million payout. It emerged that more than £128,000 had been amassed in the bogus account.

Following the discovery, FrontRow Legal succeeded with a summary judgement application for £128,000 against Parr, awarded by Chancellor of the High Court Sir Geoffrey Vos in February 2017.

It later emerged that Parr went on to set up Medipro Recruitment in order to compete with Keystone, breaking his restrictive covenants agreement following his voluntary departure in 2014.

FrontRow Legal successfully argued that Parr had breached his fiduciary duties using money stolen from Keystone to set up and operate the rival business.

The case was heard over 10 days at Manchester High Court where Parr was found liable to the sum of £650,612.04 last month, with costs, interest and damages to be assessed.

Richard Cramer (pictured), partner at FrontRow Legal, commented: “We are extremely happy with the result for Keystone Healthcare which has been a culmination of two years’ hard work to uphold the reputation it has worked incredibly hard to achieve.”

“As the trial progressed, more and more evidence was uncovered including fraudulent expenses, invoices and database infringement. The settlement awarded by the judge reflects the serious nature of the fraud and deception against Keystone and we’re delighted with the result. We look forward to putting an end to the matter when further damages are awarded in the summer.”

Robina Hussein, partner at FrontRow Legal, added: “The case examines the line between setting up in competition after resigning as a director and the situation where liability will be incurred. In this case, it was crystal clear that the competing business had been set up in a way that clearly breached the restrictive covenants, signed by Mr Parr.”

“It’s extremely rare for a case like this to go all the way to the High Court. A lot of time and work could have been avoided had Mr Parr cooperated at the start and throughout the process.”

Martin Budworth, commercial barrister at Kings Chambers, acted for Keystone throughout the case. He said: “Our client was successful in proving that the director resigned with a view to diverting the benefit of Keystone’s existing business contacts. The case demonstrates that directors can have an ongoing duty to their company continuing long after termination, because if the director’s exit from a business was influenced by a desire to exploit business opportunities, then the director can be found liable for the company’s arguable losses.”

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Mark Dugdale

Mark is the Editor of Yorkshire Legal. Mark welcomes articles, letters or feedback from readers and can be reached by emailing mark.dugdale@barkerbrooks.co.uk