Contractors for Justice (C4J) has this evening announced that it is stepping up efforts to follow through with a proposed Group Litigation Order (GLO) against Purplebricks, on behalf of former agents that were hired as self-employed estate agents by the company, which could block any sale of the online estate agency; potentially disastrous for the firm given its current financial position.

The premise of the claim is that, in law, these self-employed agents were in effect employed for the purposes of holiday pay and pension contributions being owed by the company to the individual. The claim is for as much as 20.7% of each person’s total earnings.

C4J has compiled two letters today, which you can read below, in relation to the Purplebricks ’self-employed’ claim.

The first letter is written to Helena Marston, Purplebricks’ CEO. This sets out that the online estate agency has been given six days notice to begin settlement negotiations with regard to the proposed C4J claim on behalf of 192 claimants in a claim that is valued at £8,439,673.

The amount of money being pursued is the amount with interest that C4J are claiming for the 192 individuals regarding PB’s alleged non-payment of employees’ holiday pay, car allowances and pension contributions whilst self-employed.

The contention is that these self-employed claimants were, in fact, employed in the eyes of the law. Failing this, C4J will be issuing proceedings in the High Court from midday on 1st June.

The second letter, is related correspondence but separate. This is a letter sent today to the Takeover Panel by C4J which seeks to ask the Panel to intervene in the proposed sale to Strike and to prevent it from completing (for now in any case).

This is on the legal basis that on 10th May Strike issued a ’no intention to bid’ notice under Rule 2.8 of the Takeover Code. They are subsequently legally prevented from submitting an offer within six months from that date, As a matter of fact they have submitted an offer and this is therefore considered unlawful and C4J are seeking its reversal.

“This is a real double blow for Purplebricks as it continues to wriggle quite helplessly on the hook,” said Russell Quirk, the PR acting for C4J.

He continued: “Not only will Purplebricks face an aggressive ramping up of litigation from a High Court action from next Tuesday afternoon, but they also face the catastrophic prospect of having to reverse or, at best, stay the sale to Strike for six months if the Takeover Panel enforce Rule 2.8 as they are fully expected to have to do.

“It’s doubtful that Purplebricks would survive a further six months given their haemorrhaging cash reserves versus overhead. They would be advised to run toward the C4J negotiating table at speed therefore.”

Purplebricks received a takeover offer from its major shareholder earlier today, a week after saying it had agreed to sell its business and assets for £1 to online rival Strike.

The struggling online estate agency said the new proposal came from investor Lecram Holdings, which has previously criticised the group’s leadership.

The offer is to acquire the entire issued, and to be issued, share capital of Purplebricks at a price of just 0.5p per share.

But the firm said it does not recommend Lecram’s offer to shareholders.

“The board does not currently consider that the proposal reflects an improvement on the proposed sale of business and assets to Strike,” Purplebricks said.

Lecram, which owns a more than 5% stake in the beleaguered firm, called for the removal of chairman Paul Pindar last year, and the appointment of property industry expert Harry Hill.

A spokesman commented: “Lecram has been engaged with the board of Purplebricks for nearly a year in an attempt to avert the situation that has now occurred and we believe our offer gives shareholders the certainty of cash now, rather than vague promises from a discredited board of something more somewhere down the line.”

Letter 1: 

Helena Marston
CEO
Purple Bricks PLC Cranmore Place Cranmore Drive Shirley
Solihull
West Midlands B90 4RZ

26May 2023

Purple Bricks PLC

You will be aware, from previous correspondence and legal action, that this Firm acts for current and former employees of your Company. Please receive this missive as a formal Letter Before Claim.
We represent some 192 individuals who, we believe, have throughout their careers been employees, and not self-employed. We note that, following a report from HMRC, you have applied PAYE from September 2021 to your workforce, but that does not obviate your responsibilities from 2015 and all accrued claims from that date.

For the avoidance of doubt, the claims which we are bringing against your company deal with failure to pay Holiday pay, Car Allowances and Pension. In total these claims amount to £6,000,237.83 which, together with accrued interest of £2,439,436.05 totals £8,439,673.88, as at 25 May 2023.

It is our intention to issue proceedings in the High Court against your company without delay.

However, we wish to extend you the courtesy of availing yourself of an opportunity to settle this matter, especially in view of your current sales negotiations. That being said, we have no intention prejudicing our own client’s position be delaying unnecessarily. You are well aware of our interest, and of the terms of our claim, not least from recent litigation. Therefore we give you six days from today’s date to agree to settlement negotiations, failing which we shall proceed without further reference to you.

We appreciate that this is less than the general minimum specified under the CPR of 14 days, but in these exceptional circumstances of your prior knowledge and the danger of our clients being disenfranchised by your sale, we are relaxed that the Court will accede.
Please therefore agree to settlement by 1200 on 1 June, failing which we shall issue proceedings without further reference to you.

Aidan Loy

Legal Director

C4J

Letter 2: 

The Takeover Panel One Angel Court London

26 May 2023

Dear Sirs

Purple Bricks PLC and Strike Ltd. {Co. No: 07622707)

We write with respect to the proposed sale of Purple Bricks PLC to Strike Ltd. (above). It is our understanding that this potentiality is to be put to the shareholders of Purple Bricks PLC at an EGM on, we believe, 2 June.

We should point out that we are not a party to this transaction. However, we represent some 192 clients in dispute over their employment status with a claim worth £8,439,673.88 due to failure to pay Holiday Pay and other statutory requisites throughout their workforce from 2015.

Our concern is that our clients may be disenfranchised via this sale.

We therefore advert you to your own Takeover Code, especially at Section 2, and especially at Section 2.8. It is our understanding from that document that a declaration on 10 May from Strike triggered Code Section 2.8 in that no other could be made within six months. And yet here we are.

We should therefore ask, as an officious bystander, if the Panel believes that all is in order, and that therefore our clients’ position has been protected.

We look forward to your response, and place ourselves at your disposal should you need anything else from us.

Yours sincerely

Aidan Loy

Legal Director

C4J

Lomond completes Purplebricks portfolio acquisition