Administrators in at Blakemores
ADMINISTRATORS have been appointed to Blakemores, the law firm that was shut down by the Solicitors Regulation Authority (SRA) earlier in the month.
The SRA intervened saying it was “protecting the interests” of the firm’s 7,500 clients.
The action led to the closure of two offices in Birmingham and Leamington Spa and the loss of 250 jobs. Leigh-based Stephensons has been appointed by the SRA to handle clients’ cases.
The firm’s ten partners have appointed Kevin Lucas of Manchester insolvency specialist Lucas Johnson as administrator to Blakemores, and its Lawyers2you arm which targeted personal injury business through bases in shopping centres and high footfall locations including Birmingham Airport.
Lucas said: “It was essential for the firm to appoint an administrator to take control of the situation following the SRA intervention given the value of liabilities and the value of work in progress and debtors, both of which are several million pounds.
“The timing of the intervention was very unfortunate for both creditors and clients given the impending changes and how personal injury cases are dealt with from April 1. Thousands of Blakemores’ personal injury clients will need to appoint a new solicitor to deal with their matter before this deadline or suffer a reduction in the amount of compensation they will be left with.”
From April claimants, instead of defendants, will have to cover up to 25% of lawyers’ fees from their compensation in personal injury cases. These changes were blamed for the collapse of Manchester-based Calibre Solicitors last month.
Blakemores’ managing partner Guy Barnett told the Law Society Gazette that there was no question on “impropriety” in the firm’s failure. He said the SRA’s intervention, “arose from the cumulative effect of the recession, such as the unhelpful attitude of the banks and legal aid changes, all combining to break the camel’s back.”
Lucas said the insolvency would allow redundant staff to be outstanding wages paid from the government’s National Insurance Fund. He added: “My colleagues and I now have a substantial amount of work to do to preserve as much of the value of the business as possible for the benefit of creditors.
“I think some of the issues that have arisen here will have wide reaching implications for the legal profession including the attitude of banks to funding law firms, which is not the sort of news any solicitor or lender needs at this moment in time.”