Minster Law loses £35m in a year but vows to bounce back

Topics: Personal injury & clinical negligence,Financial results

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  • Michael warren

Personal injury firm Minster Law has reported a 52% drop in turnover and £35m overall loss in its latest set of accounts published today.

The Yorkshire firm, part of insurance group BGL, blamed the poor performance in the year ending 30 June 2015 on a revised accounting policy and problems in dealing with the aftermath of the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act.

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Minster Law managing direct Michael Warren (pictured) said that the backlog of post-LASPO cases was such that fee-earners were handling up to 500 cases each towards the end of 2014. That figure has since fallen to an average of 220 per fee-earner.

Changes in accounting policy were implemented to ‘move from an anticipation of income to recovered income when a case passes a certain time in its life cycle’, said Warren.

Overall, Minster Law posted income of £25m for 2014/15.

Warren said: ‘Whilst you would not expect any business to budget for a £35m loss, the performance in the subsequent year is better and we have pretty much put this behind us.

‘These figures are nine months old and driven by changes in accounting policy. Undoubtedly there are operational challenges post-LASPO but now we are through those challenges and operating where we want to be.’

Warren said staff numbers were now stable at 600 and the firm took on extra temporary staff last year to deal with the backlog of cases on its books.

He said the firm is bolstered to face future challenges - not least the prospect of George Osborne’s increase of the small claims limit for personal injury claims - through its membership of the BGL group, which has the likes of Marks & Spencer, Lloyds and RAC on its books.

‘We exist as a captive PI law firm to service those insurer brands,’ said Warren. ‘We know the quality is good. We are part of that value chain.’

Readers' comments (17)

  • One issue for bulk insurer/BTE firms like Minster is the fact that they'll likely have to swallow much more in terms of small claims if/when the limit goes up. Much easier to tell a Claimant no than an insurer who provides you with X number of cases every month/year.

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  • Inevitably there will be further consolidation in this sector in the next 18 months. Only those with a low cost base and efficient process will survive, or alternatively firms will need to diversify their legal services offering.

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  • How can any fee earner deal competently with 220 live cases (let alone 500)..?

    Is this firm on the SRA's watch-list?

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  • Marshall - standard numbers in fast-track RTA and EL/PL work these days.

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  • Firms are really starting to feel the bite following the drastic April 2013 insurer driven costs reductions. And this is before the threatened SCT increase. The evidence suggesting that the SCT increase is wholly unjustified is gathering daily. If it does go up in April 2017 then it may be academic anyway since the number of firms doing PI will have been significantly reduced anyway. It is ironic that the Tories are so determined to rid the populous of one of the few areas where there is real free competition between firms and which facilitates proper access to legal services. I thought the Tories were the free market / free economic party!

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  • They had a turnover of over £100m a few years ago!.

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  • More press releases from firm's marketing departments. I logged into the Gazette to see if there were any useful comments on the budget and in particular if the long await Stamp Duty Regulations had been issued and the top two "stories" are firms puffing themselves or indulging in damage limitation. Would some real news be too much to ask for?

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  • Is this the type of outfit which lodges claims for £1m plus £240,000 p a and then settles for £50,000 i e less than 5% just 2 weeks before trial? Yes, there are flaky experts, yes initial assessments vary over time, but down by more than 95%? Pull the other one. Do we sound that naive?

    If I were in charge of NHSLA I would withdraw all Part 36 offers and take every claim to trial, every single one. And if they don't the NHS will be ruined by this type of activity.

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  • As someone mentioned above it wasn't that long ago they heralded a £100m turnover but I recall that was only yielded a £2m profit ie 2% . It is not surprising the 2% profit has evaporated with the massive reduction in RTA fixed costs, but to post a £35m loss on a £25m turnover is astonishing . Turnover is vanity , profit is sanity. I hope the SRA are watching closely.

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  • David Crawford
    I am glad you don't run NHSLA, If you did the whole NHS budget would be swallowed by your department in no time at all. If you don't understand personal injury litigation don't comment on it.

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