Australia-listed Slater and Gordon has downgraded its profit forecasts after experiencing slower case resolutions than expected.

In an announcement to the Australian stock exchange this morning, the firm said it had experienced ‘lower than expected’ results in segments of its UK business in November.

S&G is also considering writing down the book value of its UK business after George Osborne's announcement last month that the government would scrap general damages for minor soft-tissue claims and increase the small claims limit to £5,000.

In tandem with a review of the company’s approach to forecasting initiated by the new chief financial officer Bryce Houghton and independent advisers appointed by the board, the UK trading slowdown has resulted in 2016 financial year guidance being 'reconsidered'.

Group managing director Andrew Grech (pictured) said: ‘It is now clear to us that the slower rate of case resolutions in the first half has had a larger impact than previously thought, and that this may well flow through to a reduced profit for the full year.

‘For this reason we have withdrawn our full year guidance and we are conducting a review of our forecasting methods so that we can provide the market with greater clarity moving forward.’

Slater's shares closed down 17% on the day at $A0.89 (43p). As recently as April they were trading at nearly $A8, but following a steady slide Slater's value halved overnight on 26 November to under $A1 after Osborne's Autumn statement in the Commons. This means the firm's market value has crashed by nearly 90% in less than nine months. 

Grech said that while the first half of 2015 as a whole has been ‘difficult’, the performance of the UK business has been improving during the last few months and is ‘expected to contribute positively to cashflow’ in December and during the remainder of the financial year.

‘The trajectory of the UK business provides confidence that we will trade through this period to be in a stronger position by the end of this financial year.’

The firm said its financiers have been kept informed of the position throughout, and Slater and Gordon has more than A$100m ‘headroom’ within its banking facilities.

However, Grech alluded indirectly to the chancellor's proposed reforms and the fact that the firm is already anticipating the effect they could have on the value of the UK business. He added: 'Having regard for recent events, including the impact of those events on the company’s share price, the company will test its goodwill values for impairment of the UK business at the half year ending 31 December 2015.

'The impairment review will take into account matters including the risks associated with the proposed changes to the law by the UK government which may not be enacted either in their current form or at all. If the company assesses that it is appropriate to impair goodwill related to the UK business, any impairment will not impact cash flow from operations but will impact statutory profit.'

Slater and Gordon regards itself as the best-known law firm brand in the UK and is thought to have around 12% of the personal injury market following a series of acquisitions since 2012.

The biggest of these was earlier this year when the company bought the professional services division of listed UK company Quindell for around £637m.

Slater faces the additional headache of an ongoing enquiry by market watchdogs. The Australian Securities and Investment Commission has been investigating Slater and Gordon since June, when its revealed its first surprise downgrade.

Baillieu Holst analyst Nick Caley told the Sydney Morning Herald that the broker had slashed its expectations for Slater and Gordon's UK earnings by 5%. 

'We confess to having low confidence in our forecasts for operations outside of Australia at this time,' Caley said.