PI giant posts £1.5m loss but remains upbeat

One of the country's biggest personal injury firms has recorded a trading loss for the second year as it builds towards its long-term targets.

Yorkshire firm Minster Law made a £1.5m loss before tax in the year ended June 2022, down from the previous year’s deficit of £4.2m.

Chief executive Shirley Woolham said the results were expected, as Minster takes a short-term hit as part of a three-year business plan.

And the owner of the business, insurance giant BHL (UK) Holdings has given it a ringing endorsement, saying Minster is well positioned to be a ‘market-leading proposition’ for customers and partners.

Woolham said she was more confident than ever that the firm will be one of a small number of providers capable of making a profit in a PI sector characterised by diminishing margins.

‘Nobody can be in any doubt that this is a challenging market, but neither we nor our shareholders ever pretended it was going to be any different,’ she added. ‘We knew the immediate post-reform world, exacerbated by a significant drop in claims volumes during the pandemic, would impact our financial performance, so we have planned for it.’

Turnover for the year was ‘in line’ with plans at £28.3m (down from £28.7m in 2021), which reflected the reduced income from low-value, high-volume claims following the introduction of reforms in May 2021.

Many established firms have sought to sell their low-value work and concentrate on specialist serious injury PI. Minster has said it intends to continue doing both, and insists it will be one of a handful of firms to handle RTA claims at a profit.

Woolham said: ‘There is still turmoil in the market, for example the outcome of the mixed injuries issue continues to act as a drag on claims progression. Moreover, access to cash and working capital has become a major factor in determining who will survive and thrive.’

In 1999, at the time of the Woolf reforms, 2,000 firms were active in the PI market. Only 284 registered with the Official Injury Claim portal for whiplash claims in 2021. More than three quarters of claims submitted to the portal are from just 12 firms.

‘This is an unprecedented hollowing out of an industry, but I stand by my view that these are hugely exciting times for legal services providers, such as Minster Law, who are able to meet the criteria required to create value for shareholders, insurer clients and customers,’ added Woolham.

‘As a result, I’m confident that, over the next 18 months, we’ll further strengthen our market position and achieve our aim of becoming the pre-eminent legal services provider to the insurance sector.’

Commenting on the results, Ian Leech, chief executive of BHL (UK) Holdings Limited, said: ‘We are hugely excited by the opportunities for Minster Law and the wider group after the industry completes this period of transition. It is our role to look beyond the short term and provide the backing, in both working and investment capital to enable management to develop a market-leading proposition for our customers and partners.’

* Meanwhile, another firm with a significant presence in the personal injury market has confirmed it increased profits in 2022.

NAHL Group said that revenue was up 6.4% to £41.4m in the year ended 31 December, with profit before tax up from £200,000 to £600,000. The increases had been forecast in a trading update published in January.

Net debt was also reduced by 14% to £13.3m. The company, which was originally focused on claims management for other firms, has started its own practice National Accident Law, which increased its cash received from settled claims by 67% to £3.5m.

James Saralis, chief executive of NAHL, said: ‘To deliver a significant reduction in net debt, return our personal injury business to profit and continue our growth in critical care, despite the wide-ranging macroeconomic factors working against both our sector and the economy is testament to our people and the investments we have made over the last few years.’

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