The administrator of defunct criminal law practice One Legal has reached agreement with leading insolvency litigation funder Manolete to pursue claims following its collapse.
The latest report from Mike Kienlen of Armstrong Watson also revealed that it was unclear whether he would be able to pay the protective awards made recently by an employment tribunal to 64 ex-One Legal staff because they were made redundant without notice.
One Legal was the brainchild of non-lawyer Trevor Howarth – the founder of now-defunct Stobart Barristers – and his original aim was to challenge the standard criminal law firm model, centralising the back-office function and providing a bespoke IT and case management solution.
One Legal acquired well-known London firms Kaim Todner and Guney Clarke & Ryan, but 80 staff lost their jobs in December 2019 due to cash flow problems.
Mr Kienlen reported that, when One Legal bought Kaim Todner in 2016, there was an overdrawn director’s loan account (ODLA) and there was litigation over this with Karen Todner, its former owner, who has disputed it.
Kaim Todner went into administration at the same time as One Legal and Mr Kienlen is also its administrator. He said it was “unclear” whether the ODLA was part of the hive-up of Kaim Todner’s assets that followed One Legal’s acquisition and thus if it was an asset of One Legal or Kaim Todner.
On the advice of his solicitors, Knights, Mr Kienlen approached litigation funders and has agreed with Manolete to pursue the claim on a joint basis with Kaim Todner.
Manolete has paid an initial £2,000 for the partial assignment.
Ms Todner told Legal Futures: “All proceedings with One Legal and Kaim Todner were discontinued some time ago. I deny any sums are due to Kaim Todner or any other entity and shall defend any action that may be taken.”
Mr Kienlen continued that his investigations into possible further recoveries – he did not say from whom – led to another deal with Manolete, this time for full assignment of the claims in return for an initial £5,000.
The administrator said he did not lodge a defence to the recent employment tribunal case.
“[I] have provided the information needed to the Redundancy Payment Service to enable the employees to make their claims. A revised claim from the Redundancy Payment Service is anticipated.”
But he said it was “uncertain” whether there would be a distribution from the administration of staff as preferential creditors.