Claims Direct holders may sue

CLAIMS Direct shareholders and franchisees have been asked to contribute to a fighting fund that will be used to sue the compensation specialists' former directors and financial advisers.

Wynne Edwards, a partner in legal firm Class Law, said High Court writs would be issued next month if sufficient funds were raised to fight the case.

The move comes despite Claims Direct revealing today that it had offered franchisees cash settlements totalling £3.3m. The offer will almost certainly be rejected. The company's 250 franchisees will be asked to contribute £500 each to the war chest. Franchisees who also hold shares in the group will be asked for £600 plus 4p a share and other shareholders will be charged £500 and 4p a share.

The legal action will target broker Investec, which handled the company's float, and auditors PricewaterhouseCoopers. The shares were issued at 180p in July last year, enabling founding directors Tony Sullman and Colin Poole to make a £60m profit between them, but crashed to 8 1/4p in April.