Watchstone Group (WTG) , the AIM listed insurance firm, has settled with law firm Slater & Gordon on Monday.
The two companies agreed on a settlement, with £11 million of the £50 million held in escrow to be released to Slater & Gordon, and the balance of £39 million and accrued interest to be released to Watchstone.
Both parties will not be applying for costs.
Shares in Watchstone Group surged 42% to 152p following the news
Richard Rose, Non-executive Chairman of Watchstone said: "Whilst Watchstone remains firmly of the view that the legal action commenced by the other side was without merit, the board believes that a settlement at this level is in shareholders' interests as it brings certainty.”
He added that the settlement “also releases a significant cash sum that has been locked in escrow and unavailable to us for some considerable time. The decision was made with consideration of the costs of pursuing the Company's defence and counterclaim at trial and to the inherent uncertainty of the outcome of any legal process."
Slater & Gordon sued Watchstone for breach of warranty and fraudulent misrepresentation after acquiring and Watchstone, formerly known as Quindell for £637 million in 2015, which it had to write down £450 million in value of the business within a year.
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