A specialist costs firm which claims to be the country’s largest has agreed a deal with creditors to repay debts, the Gazette has learned. Just Costs Limited, an alternative business structure with 70 staff across offices in Manchester and London, agreed a company voluntary arrangement at the end of October. The company said that it continues to trade profitably and has the total support of its bank and funders.
The CVA notice, prepared by Manchester-based Bell Advisory and published on the Companies House website last month, states that Just Costs will make 24 monthly voluntary contributions of at least £33,412 during the term of the arrangement.
In total, the company owes £781,758 to HM Revenue & Customs, £29,836 to financial advisory firm Bennett Brooks and £17,429 to landlords I2 Office Limited.
The total value of creditors’ claims comes to £829,000. It is expected that 100% of that sum will be repaid over the course of the arrangement.
The notice reports that creditors and members of the firm met in Manchester in October, where the directors’ proposal for a voluntary arrangement was accepted by those present.
The arrangement will remain in place unless there is any winding-up order against the company or the company goes into administration. A supervisor will conduct a full review at each anniversary of the arrangement where Just Costs will be required to supply profit and loss figures for the previous 12 months.
Should any contribution fall 30 days into arrears or fall short of the amount expected – and remain so for 30 days – the supervisor shall petition a compulsory winding up of the company.
Directors of Just Costs are barred from paying themselves any dividend for the two-year period or increasing the remuneration of people involved in management.
Just Costs, which recently celebrated its 10th anniversary and moved to new offices in Fetter Lane, London, has established itself as one of the leading firms in the industry. It specialises in commercial litigation, clinical negligence and personal injury costs and is a familiar presence to many lawyers through regular seminars and winning a string of industry awards.
In a statement the firm said: 'The business has traded profitably every year since our inception in 2006. We continue to do so and our forecasts moving forward show continued profitability. We continue to have the total support of our bank and funders.
'Following the introduction of fixed costs for high-volume/low-value personal injury work and the introduction of the costs management process, we have had a number of challenges to meet over the last couple of years. We have consolidated from four to two offices. We have reduced our headcount from 110 to 70.
'Our major challenge has been to move from cases with a 90-day matter cycle to over 12 months, compounded by the fact that HMRC treat our work in progress as income, even when it has not been invoiced. This lead to the arrangement we have recently entered into with HMRC. This arrangement provides for 100% of the debt to them to be repaid. We will be meeting our liabilities in full.
'We are dealing with work of an ever-increasing value and complexity. It is business as usual.'