A once-prominent name in the personal injury sector has been forced into liquidation, with creditors likely to lose out on almost £1.3m owed. Liquidators were appointed last month at Derbyshire firm Spencers Solicitors, with the business closed immediately.

A statement of affairs published at Companies House reveals the business’ assets to be around £427,000, with cases valued at £235,000 transferred to other firms. Spencers owes around £217,000 to HM Revenue & Customs, which is listed as a preferential creditor.

Unsecured claims come to around £1.5m, including £285,000 owed to employees and £403,000 owed through a loan agreement with a single director.

Spencers existed for almost 50 years and was led by John Spencer, a former president of the Association of Personal Injury Lawyers. Spencer is still a director of the business, but the firm has been led since 2013 by chief executive Robert Landman.

The firm – then called CS2 Lawyers – had been a success story of the post-2000 boom in personal injury work: in the year before the Jackson reforms turnover was almost £7.5m and profits came to nearly £2m.

Like many others in the sector, the business concentrated more on complex and serious injury as the revenue streams from motor claims tightened up, but turnover by 2016 had fallen to £1.6m and the firm was reporting annual losses in excess of £1m.

Staff numbers dropped from 138 in 2011 to around 50 in 2021 – the last year for which financial statements are available.

New research has found that 61 law firms went insolvent in the year to March 31, up from 46 in the previous 12 months, as the cost of living crisis affected businesses in the legal sector.

Chartered accountant Lubbock Fine said a combination of a slowdown in demand and rises in the cost of energy, staffing and PII had sent some firms over the edge.

Wider economic problems were also causing some previously reliable clients to take longer settling their bills, Lubbock Fine partner Mark Turner suggested. 

‘Law firm insolvencies are accelerating as the cost of living crisis worsens,’ added Turner. ‘Late payments are stretching some firms’ cashflow to breaking point. With overheads likes salaries and energy increasing and inflation stuck at 10%, the cash flow situation for a lot of firms is getting very tight. Even some law firms not previously touched by financial challenges are having to tighten their belts.’


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