legal

North west PI firm goes under with all staff made redundant



One of the most prominent personal injury firms in the north west has been broken up and sold, with staff made redundant as a result. The Gazette understands that Liverpool-based Hampson Hughes was officially placed into administration last week after attempts to rescue the business were unsuccessful.

Insolvency firm Leonard Curtis was drafted in earlier this month to advise on the orderly closing down of the business, after a long-term fall in turnover brought on by personal injury reforms.

The firm was then subject to a pre-pack administration sale to Recovery First Limited, which specialises in buying work in progress from solvent and distressed firms and finding new homes among its panel firm members to achieve the best outcome for clients. Files have now been transferred and the staff were told last week to find alternative employment.

It is understood that director Paul Hampson, who has not actively worked in the firm for three years and was not aware of the closing down plans, made a last-minute offer to try to preserve the business. This was rejected and the company was placed into administration.

Accountancy firm Grant Thornton has been appointed as joint administrator to review the closing down process.

Hampson told the Gazette: ‘It is with great sadness that I have not been able to employ the staff at Hampson Hughes and take over the business as a going concern.’

Hampson Hughes was founded in 2009 and worked only in personal injury and clinical negligence work – much of which has become less profitable through a series of government reforms culminating in the Civil Liability Act, which scrapped recoverability of legal fees for whiplash claims valued less than £5,000.

But the downfall of the business preceded the most recent changes, according to published accounts. Turnover slipped from £12.9m in 2017 to £9.3m in 2018 and then to £5.7m in 2019. Operating profits dropped from £1.35m in 2017 to £218,000 in 2019, while the number of staff fell from 200 to 132 in just a year. By the end, the headcount had fallen to around 20 and no new matters had been taken on for some time except for clinical negligence work.

In spite of this, the firm last month appointed three new members to its clinical negligence team, taking on a solicitor, assistant solicitor and litigation executive. The firm said at the time that the recruitments were ‘part of our drive to solidify Hampson Hughes as a leading north west firm for clinical negligence work’.

The firm also made headlines in 2019 when the Court of Appeal ruled it was not entitled to a 100% success fee without reference to the risks of taking on a case, with then  master of the rolls Sir Terence Etherton dismissing the firm’s appeal and saying its charging model could not be justified.



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