Settlement hint in Unilever case

THE High Court clash between household products giant Unilever and Mercury Asset Management was suspended amid speculation that they have resumed negotiations aimed at reaching a settlement. The companies refused to comment but Mr Justice Colman said the sudden adjournment was granted 'for the convenience of both parties'.

Sources close to the case, which has incurred legal fees of many millions of pounds, indicated that an out-of-court settlement was again a possibility. It is believed the pair failed several times to strike an agreement in the lead-up to the hearing, which began in mid-October and was due to run until 19 December. Unilever is suing Mercury, now part of Merrill Lynch, for £130m for the poor performance of part of its pension fund in 1997 and 1998. The company has claimed the UK equity portfolio managed by Mercury was far too high-risk.

As well as any financial benefits, a settlement would spare both parties the risk of being heavily criticised in Mr Justice Colman's judgment.

Mercury's star fund manager Carol Galley has told the court that Unilever made a 'crude attempt at blackmail' during attempts to reach a settlement. But she also admitted she had failed for two years to tell Unilever she had passed management of its fund to colleague Alistair Lennard.