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.
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.’