The legal director of a new alternative business structure (ABS) specialising in cases for people classed as contractors has said he hopes litigation brought by the firm in the next few months will “open the floodgates” to more claims.
Aidan Loy said C4J, which stands for ‘Contractors for Justice’, already has 1,500 clients and should launch legal proceedings in three group claims within the next few months.
C4J Ltd, incorporated in July 2021, employs 28 staff at its offices in Lincoln and Bournemouth. The solicitor, who joined in March last year, is one of five directors. Andrew Thornhill KC, a tax and employment law specialist, is another.
Mr Loy said the firm concentrated on workers’ rights claims, often for holiday pay or unlawful deductions. Employees were often working as self-employed ‘contractors’ for umbrella companies – an alternative to personal service companies – meaning that they saw deductions from pay for the likes of National Insurance contributions, workplace pension contributions and holiday pay.
C4J obtained its ABS licence from the Solicitors Regulation Authority in May, with Mr Loy as COLP and Leanne Mayo, another director, as COFA.
He said there were discussions about the firm becoming a regulated claims management company, but it “did not really suit” the business, which intended to begin with group claims and then expand the range of its work.
Mr Loy said one of the group claims where he believed legal proceedings would be launched within the next few months involved people who worked as self-employed contractors for the Financial Ombudsman Service (FOS).
He said C4J acted for 50 former FOS contractors, who would be claiming around £5m in total.
C4J says on its website that FOS “engaged with contractors directly via their personal service companies and more latterly since April 2017 via umbrella companies”.
The contractors were “unequivocally workers and as such should have received, but did not, holiday pay and pension rights”.
Mr Loy said C4J was also working on a group action against online estate agency Purplebricks, which was sold for £1 to rival Strike earlier this year.
The third group claim was on behalf of airline pilots who worked as self-employed contractors and did not receive holiday pay or pension rights.
Mr Loy said he hoped that, when these cases kicked off, they would “open the floodgates” to more. Some could be against government departments that followed the approach taken by FOS.
Mr Loy qualified as a solicitor after working as a senior civil servant, for Michael Howard as employment secretary among others. After working as a City employment partner, he set up his own employment law firm in the City, Aidan Loy Solicitors, which he ran for nine years.
Later he moved north, working as director of operations for a technology firm, and then briefly again as an employment law solicitor before joining C4J in March 2022.
“I was about to retire, but this gives me the chance to help to effect a change in the law, which would be quite a fun swan song to my career.”
A spokesperson for FOS said: “The Financial Ombudsman Service holds itself to the highest standards and engages with its workforce and contractors with absolute integrity.
“The ombudsman service takes all legal challenges extremely seriously. We consider this proposed claim against the service, as it is currently outlined, to be unsubstantiated and without merit.”