Brian Gorman and Ben JonesA High Court trial involving rival London-based social-worker recruitment agencies ended abruptly after six days of testimony when the parties decided to settle.

The case centred around the alleged misuse of candidate data after a consultant, Billy Richard, left Social Workline and joined competitor Action First Recruitment Consultants.

In a statement, the agencies said: "Action First and Social Workline have resolved their differences, both parties recozgnising that their time and energies are better spent on their recruitment businesses."

Details of the settlement were not disclosed, although Richard Pomerenke, founder and owner of Social Workline, said it was the seventh offer Action First had made. Pomerenke said he was "very happy" with the outcome and had celebrated with champagne after the settlement, but he declined to say whether the settlement covered the £600,000 legal expenses he claims to have incurred.

As well as Richard, Social Workline sued Paul Godfrey, owner of Action First at the time of the alleged misuse of data in early 2003. Godfrey later sold his business to Public Recruitment Group. The case against Godfrey was dismissed. There was no order in the case against Richard.

During the case, the court heard how fierce competition had emerged in the social-worker recruitment sector, with Social Workline's decline in business, attributed to its contact data being used by Action First.

A candidate who had registered with Social Workline told the court she had been subsequently contacted by Action First. She said: "I remember asking them how they had got my phone number."

The court heard how Social Workline's profits and turnover had fallen in recent years. But Nigel Tozzi, QC for Action First, put to Pomerenke that there other were a variety of reasons, unconnected with misuse of data, for the company's drop in business. Pomerenke claimed the loss was in seven figures but Tozzi argued that the most Social Workline could attribute to data loss was £5,800.

Questioned by Tozzi, Pomerenke admitted he had written a fax sent in September 2006 to the publication Recruitment International. This fax had purported to come from the finance director of Action First, offering to divulge details of the company's activities. Pomerenke said stress had caused him to compose the fax. The court heard Pomerenke testify how the dispute had affected his health.

Tozzi put it to Pomerenke that he had become "obsessed" with the case and had become too busy with it "rather than getting on with your job". Pomerenke said he preferred the word "determined".

The court heard that Social Workline opened a branch in Oxford, which it then closed. Tozzi suggested to Pomerenke that he had made a mistake in refusing to work with master vendors. Pomerenke said margins from work through master vendors were low. However, he later decided to participate.

A mailshot to 5,000 social workers yielded "disappointing" results, Pomerenke admitted, with a return-rate of "about 1 in every 1,000".

Godfrey declined to comment. Action First declined to comment beyond the prepared statement. Richard said he would only talk to Recruiter if offered payment. He told Recruiter he was no longer working in recruitment.