Ex-KWM staff set for payout as group accepts 'maximum recoverable' settlement over layoffs

Former King & Wood Mallesons (KWM) staff have accepted a financial settlement offered by the firm’s administrators over the way their redundancies were handled when the firm’s European arm collapsed in January.

The group of about 200 staff, who brought the employment tribunal claim in February, have accepted a settlement proposal of eight weeks’ pay for each claimant, offered after administrators Quantuma admitted a “technical breach” in the required duration of a redundancy consultation when it was carried out by KWM.

Before making more than 100 redundancies at one time, UK employers are obliged to enter into a formal consultation process of 45 days before the first dismissal.

An email to staff in the group from their solicitors, Herrington Carmichael, sent yesterday (7 September) confirmed that it has received “full acceptance of the proposal from all claimants” and that it has now applied to the Employment Tribunal for a judgment.

The email states that after Herrington Carmichael receives the judgment, it will forward it to the Redundancy Payment Office to trigger the claims. Payments will be made to Herrington Carmichael and then distributed to claimants by the firm.

Herrington Carmichael has reminded the claimants that the settlement offered is the “maximum recoverable” value available from any claim.

One member of the claimant group told Legal Week: “At long last – the result we’ve all been waiting for. I’m not holding my breath for a speedy judgment given our experience to date though. Hats off to our lawyers who have been superb throughout, despite the delays caused primarily by the Tribunal.”

The claim was hit by delays in the summer, caused by IT delays at the Employment Tribunal. Herrington Carmichael made a formal complaint to the Employment Tribunal about the delays on 1 June, describing it as “excessive and unnecessary”. The claim eventually progressed in July.

Any payouts made will be capped at £479 per week per person, equating to a maximum individual payment of £3,832 from the Redundancy Payment Office. Any unpaid wages already paid will be deducted from this total.

Based on 200 former staff and lawyers receiving £3,832, the total payout from the Redundancy Payment Office will total £766,400, less any unpaid wages already drawn.

The settlement proposal was made earlier this month (4 August) and members of the class action had until 11 August to accept the proposal.

Yesterday (7 September), a new progress report from KWM’s administrator Quantuma was filed on Companies House. The report details fees paid to the firms advising on the collapse, revealing that the administrator has received almost £1.1m so far for its services.

CMS Cameron McKenna has been paid almost £850,000 in fees and disbursements for advice on what the report describes as “the complex legal issues which have arisen both in the pre and post administration periods”. Pinsent Masons has received more than £186,000 for its work on the administration, while Ashfords has been paid almost £300,000 in fees and disbursements in its role as solicitor manager for the firm.