Ousted AA boss launches £225m claim after sacking

The AA is facing a claim of up to £225m in damages from its former executive chairman, who was sacked by the breakdown company last year after a “sustained and violent assault” on a senior colleague.

Bob Mackenzie is making the claim based on what he says could be the value of shares the company awarded him under a long-term bonus plan. However, the AA says he is no longer entitled to the shares after his dismissal for gross misconduct on 1 August.

Announcing results for the year to 31 January 2018, the board said it had not set aside any sum for damages and expected to be able to recoup legal costs of about £1m.

“The group has not made a provision for these amounts, as the group expects to be successful in rigorously defending these claims,” the AA said.

“However, the group will incur legal costs of approximately £1m to defend these claims during the next two financial years, which it would seek to recover from Bob Mackenzie when the litigation concludes.”

Mackenzie’s late-night altercation with the AA’s Mike Lloyd took place last summer in the bar of the five-star Pennyhill Park hotel in Surrey, and was captured on CCTV.

Mackenzie’s lawyers are understood to be claiming he was wrongfully dismissed, having been under extreme pressure, and should be entitled to damages. They will also say that the company had excluded him from talks over a proposed merger between the AA’s insurance business and rival Hastings, which they say was a factor in the incident.

Friends and family members have said the company had placed extreme pressure on Mackenzie, who was “not well” and had mixed the prescription drug diazepam with alcohol before the attack.

He had been executive chairman of the AA since 2014, when he was instrumental in the stock market flotation.

Simon Breakwell, the AA’s chief executive since September, said the sacking ad not overshadowed the company’s “solid performance” during the year.

Revenue rose by 2% to £959m, while pretax profit increased by £41m to £141m. However, the AA said it had faced higher costs from its reliance on third-party garages at peak times and during the bad weather, when its vans were too busy to attend callouts.

The company is hoping to capitalise on its “car genie” device, launched in August with the potential to predict up to one-third of breakdowns for customers before they happen, according to the AA. It is now in use in 6,000 vehicles.

Breakwell said investment in technology would reduce the company’s short-term profitability, but was “vital to our long-term success”.