Vestra Wealth Management, which yesterday agreed to settle a legal row with UBS over mass staff defections from the Swiss bank, has accepted that no UBS staff not yet at the wealth management start-up can begin work at Vestra until 5 April next year, WealthBriefing understands.

The firms, which have been embroiled in a bruising legal row about Vestra’s recruitment of dozens of UBS client managers, announced they have reached a settlement ahead of a planned High Court trial in October. Their statement did not spell out the terms of the agreement, however.

No departing UBS staff not yet working at Vestra will be allowed to work until 5 April next year. In return, UBS will completely drop its legal case against Vestra on that date, WealthBriefing has learned from people familiar with the matter.

The case has sent shockwaves through the wealth management industry and highlighted the issue of how firms such as UBS can impose tight contract terms on staff to prevent them defecting with clients. UBS has recently reported outflows of clients in the wake of massive credit-related losses. Its lawsuit against Vestra was seen as part of a determined fightback by the Swiss banking group.

In its statement yesterday, a spokesman for Vestra said: “Following an interim hearing which took place in the High Court pending full trial in October, we are pleased to say that a settlement has now been reached.  Due to the confidential nature of this agreement we are unable to comment any further.” 

UBS issued the same statement and declined to comment further when contacted by WealthBriefing.

Earlier this month, Zurich-listed UBS won a High Court “springboard” injunction preventing five former employees and Vestra from approaching any UBS wealth management or stockbroking clients or asking any more UBS staff to join it. The ruling came after 52 UBS employees resigned from UBS to join Vestra.

Subsequently, two employees, David Guild, a London-based investment manager, and Keith Merrick, also an investment manager, have changed their minds and are staying at the Swiss banking and wealth management giant.

The legal clash has hinged around the issue of the restrictive clauses that were imposed on former UBS staff relating to their ability to work for other firms and solicit business. In the ruling in early August, Mr Justice Openshaw said he was "firmly of the view that the claimants have put forward a formidable case that there was an unlawful plan to poach staff and clients from UBS", and that "It is in my judgment an unlawful conspiracy dressed up as lawful competition".

The founder of Vestra, former UBS manager David Scott, has maintained that there was nothing untoward about his recruitment of UBS managers and has also argued that the ruling has not derailed the launch of his firm, which is based in London’s City financial district.

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