Corporate Veil and Misrepresentation in Slater and Gordon Case

Running Head: BUSINESS LAW
BUSINESS LAW
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Author Note

1BUSINESS LAW
Introduction
The law firm Slater and Gordon has faced class action from the shareholders. The law firm faced
class action from thousands of shareholders after the law firm faced allegations that it had known
its financial position. The class action involving 3,000 members and an amount of 250,000
dollars had been led by the Rival firm Maurice and Blackburn. It had been alleged by Andrew
Watson from the Maurice Blackburn that the law firm Slater and Gordon had mis represented the
financial prospects after the firm acquired a division of company Quindells in April 2015. It had
been accused by Mr. Watson that the company had given false statements about the financial
standings of the company. It had been alleged by the plaintiff Matt Hall that he had lost almost a
illion dollars and that the company had known that it was going to lose money.
Issue
The issue that has been identified in this reported case is whether the Law Firm Slater and
Gordon had misrepresented its financial prospects.
Rule
It has been provided in section 728(1a) the Corporations Act 2001that a person must not offer
securities by a disclosure document which has a deceptive and misleading statement. Further it
has been provided in subsection 728 (2) a person who gives any statement about a future matter
without sufficient grounds for making the statement will be held to be giving a misstatement.
According to subsection 728(3) it can be stated that a person commits an offense if it is found
that such person has contravened the provisions that has been provided in subsection 728(1), if
such person gives a deceptive and misleading statement or if such person omits a new
circumstances in the statements.

2BUSINESS LAW
It has been provided in section 674 of the Corporations Act 2001 (Cth) every business
organization has the obligation to make continuous disclosure of material facts according to the
listing rules. It has further been provided in subsection 1041 A that a person must not carry out
or take part in any business transaction that might affect the creation of artificial price for trading
in a financial market or financial products.
According to article 1041 B a person engaged in business must perform any act or omit to do any
act if such act or omission is likely to create a misleading or false appearance. Further in
accordance with section 183 of the Corporations Act (Cth) 2001 it can be stated that it is the
duty of the directors to act in good faith
Application
Thus it is evident in the chosen case that the directors of the Law Firm Slater and Gordon failed
to disclose to the market the statements about its financial prospects. Further it can be stated that
the directors had given misstatements about the how the company was performing. Therefore,
the law firm Slater and Gordon had violated the provision as provided in section 728 of the
Corporations Act 2001 (Cth).
However, in this case Slater and Gordon had misrepresented their financial prospects and many
shareholders had relied on the miss representation and invested in the law firm. The company
presented a false image of how it was performing.
However in this case, the directors did not act in good faith as they did not disclose the true
picture of their business
Conclusion