Theres something not right under your car M8 . I'd be getting it checked out . Seriously . There should be zero lateral movement on a watts link set up .

he raises a good point actually... In the picture shown in this thread than no it would not move sideways... My theory is this...

When the bolt on the back of the diff is in the dead middle of the watts arm body bolts on the vertical travel plane... And if the arms are dead parallel at this point then no it cannot move sideways... If the arms are not dead parallel then the diff will move sideways a fraction... All depending how far out of parallel the arms when the diff is in the middle of the arm body mounts... Never paid that much attention to see if the arms are parallel... But old mate bringing it up has got me thinking how this could be so.... And this is all i can think of... This would give some lateral movememnt...

Cheers,
tim