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Posted: 2019-01-18 13:05:00

In turn, Slater & Gordon guarantees its clients' obligations to repay EAF. EAF's sole client for many years was Slater & Gordon and all current representatives listed on its credit licence are current senior staff at the law firm bar one who is a former lawyer at the firm who left in 2018.

Speaking for the first time since his departure from Slater & Gordon, Mr Grech said he did not see any issue in him becoming a director and half-owner of Equal Access Funding.

"I think if you apply the pub test that these are arrangements that are clearly in the clients' best interests because there is no recourse to the clients," he said.

"So I think it does satisfy the pub test but your readers will be able to draw their own conclusions.

"I was approached by the owners of EAF at the time to take on the role. I think they wanted to access my experience in the plaintiff personal injury area."

Mr Grech said EAF's case book was in run out mode and the group was not funding new cases for Slater & Gordon.

Since leaving the listed group, Mr Grech has been consulting to law firms through his business Juris Advisory, which operates out of his multimillion dollar beach house in the Victorian seaside hamlet Anglesea.

He received total remuneration of $1.5 million during his last year at Slater & Gordon.

A spokeswoman for Slater & Gordon said Slater & Gordon's contractual arrangements with EAF commenced several years ago.

"We understand that Mr Grech's involvement with EAF only commenced well after his departure from Slater & Gordon," she said.

Fresh legal claim

Mr Grech's new business ventures come as he prepares to face a law suit brought by Slater & Gordon's former auditor Pitcher Partners against the law firm and the group's former directors, including ex chairman John Shippen and former chief financial officer Wayne Brown.

Pitcher Partners lodged the legal claim against Slater & Gordon and its former directors after the accounting and advisory group was hit with two class actions relating to the audit it did of Slater & Gordon's 2015 accounts.

Both class action claims include key allegations that auditors from Pitcher Partners signed off on the accounts without properly identifying issues with how the group was accounting for Quindell post-acquisition.

However, the class action claims - one lodged by Maurice Blackburn and another by Johnson Winter Slattery on behalf of different groups of shareholders - are based on different legal arguments and cover different period over which the alleged breaches occurred.

Pitcher Partners has alleged in its response to the class actions, and in making its claim against Slater & Gordon and the directors, that it relied on the information given to it by the law firm about its accounts.

As such it argues that if there were issues in those accounts they were the result of omissions by Slater & Gordon and its officers and not the fault of Pitcher Partners.

Pitcher Partners, which is being represented by SBA Law, declined to comment about the cross claims it has filed.

The law firm representing the directors, Arnold Bloch Leibler has applied to stay the proceedings brought by lawyers for the two groups of shareholders.

ABL is also seeking to have two claims from Pitcher Partners dismissed.

The lawyers for the directors allege the Pitcher Partners cross claim is outside of the terms of Slater & Gordon's court-approved restructure that was completed in 2017.

That restructure sought to ring fence Slater & Gordon from future claims by including a "shareholder claimant scheme of arrangement" which protected the company and its directors from future class action claims, including any legal claim against the company by a third party as a result of a shareholder claimant bringing action against that party.

Under the terms of the restructure deal, the shareholders could be held liable for any findings against the directors that result in a monetary payment.

ABL is not representing Slater & Gordon, which instead is being represented by Minter Ellison as is one of the former directors -- former head of Slater & Gordon UK, Ken Fowlie, who stepped down from the board but remains an executive at the firm.

Slater & Gordon shares were trading at $2.33 at lunchtime on Friday.

The application will be heard on February 13.

Sarah is a business courts reporter based in Melbourne.

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