One of the biggest personal injury firms in the UK lost tens of millions of pounds in turnover during the first full year after the Jackson reforms.
Accounts filed with Companies House this week showed that York-based firm Minster Law recorded £55m in revenue for the year ending 30 June 2014.
The previous year’s results, which accounted for a 14-month period ending on 30 June 2013, saw £102m revenue posted. The fall amounts to £32m on an annualised basis.
The results reflect the struggles experienced by a firm dealing with the Legal Aid, Sentencing and Punishment of Offenders Act, which banned referral fees and restricted recoverability of fees in April 2013.
In 2012/13 the firm recorded losses before tax of around £600,000, and these increased in 2013/14 to £2.5m.
The reporting period was extended last year to include Minster’s May 2013 acquisition by BGL Group, owner of the Compare the Market price comparison site, for a sum reported to be the biggest ever paid for a law firm.
It emerged in the accounts that BGL Group made a loan of £73m to the company last year, with a repayment date of 31 May 2017.
In its strategic report, the board said the results were considered ‘satisfactory’ given the significant changes in the sector over the period.
The report said LASPO had reduced the legal fees that solicitors can recover in PI claims, with the sector remaining ‘highly competitive’. It notes that the firm has invested in people and technology to differentiate its service offering and to ensure compliance with LASPO changes.
The company has also diversified its legal service by increasing its capability to handle serious injury cases and more employers’ liability and public liability work.
The report added: ‘There has been a significant amount of regulatory and legislative changes which have impacted trading and the business has had to adapt to incorporate those changes. It has done so through investment in people and technology.
‘There remains uncertainty as to the extent of future changes which could impact upon the business and further changes are anticipated.’
Staff numbers overall increased marginally to 786, with an extra 17 support staff taken on during the year.