Legal aid cuts force law firm into administration

A specialist Sheffield law firm has gone into administration as the effects of Legal Aid took their toll.

Unity Law called in administrators Gareth Harris and Keith Marshall from RSM Restructuring Advisory on 2 June.

Five staff were with the business at the time of administration who have been transferred, and cases have now been transferred to CFA Law, trading as Fry Law.

The firm specialised in noise-induced hearing loss claims and equality cases, and one of its most high profile was First Group vs Paulley case held in the Supreme Court.

Unity was launched in 2011 by former Wake Smith partner Chris Fry. It attracted a six-figure funding deal in 2014 from Yorkshire Bank as it looked to expand. At that time it employed 16 and had a turnover of £1.5m.

Since then it suffered financially due to the changes in the Legal Aid Sentencing and Punishment of Offenders Act 2012 (LASPO), implemented in 2013. According to the Law Society, LAPSO implemented substantial cuts to civil legal aid.

Attempts had been made to counter this, including expanding the business and attempting to dispose of the business to third parties, all of which were unsuccessful.

Gareth Harris, RSM Restructuring advisory partner, Joint Administrator and head of the RSM Professional Services team in Leeds, said ‘It is very disappointing that despite extensive effort to rescue Unity Law in a solvent manner, this did not prove possible, but it is clear that the longer term impact of LASPO is still being felt in the legal market and it remains a challenging time for law firms. We have however, managed to protect client’s interests by transferring existing cases to CFA law Ltd.”

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