Well-known personal injury (PI) law firm Camps is to run its practice down over the next two to three years, with 50 redundancies on the cards immediately, Legal Futures can reveal.
The move is very unusual for a firm of this size, but it said next year’s implementation of the Civil Liability Act 2018 was one of the reasons why this was the best way to realise the value in the firm.
Birkenhead-based Camps, which has a public-facing brand called Your Legal Friend, is a 35-year-old practice that specialises in PI and professional negligence. It currently has a headcount of around 180 staff.
Colin Gibson, chief operating officer of parent company 2020 Legal, told Legal Futures: “We announced to staff on 4 January that many of the non-fee-earning staff – all those working in case acquisition and our first response team together with staff in most overhead and support areas – were going into a consultation regarding redundancy.
“The proposals subject to consultation, if confirmed, could involve around 50 redundancies.”
He described the plan as entering a “controlled run-off process”, which was expected to last for two to three years, in order to realise in cash the value in the firm’s current work in progress.
“The firm’s owners have chosen this timing for personal reasons rather than waiting for the changes in the forthcoming PI reforms and believe that much greater value can be achieved from an orderly run-off process overseen by members of the current management team than would be possible from a sale of the firm or its caseload at any point in the short term.
“In line with this plan and subject to future consultation, we would expect a further gradual reduction in all remaining staff, certain lease exits and further overhead reduction as the scale of operations reduces over the run-off period.”
Mr Gibson stressed that the process was “entirely under our control” since the firm has no external borrowings.
He explained the two options for the owners were to sell or to run the firm off.
“The Civil Liability Act reforms are one of a number of market factors which mean that any purchasers of a firm such as ours would probably expect to discount the existing WIP value very heavily, so we believe that running it off is the best route to realise a proper value.
“If there were buyers around with cash prepared to pay a premium for the business as a going concern, then that route might well be favoured but we do not believe that to be the case.”
Your Legal Friend is running a shareholder action against Quindell over alleged misrepresentations made by the company before it sold its legal business to Slater & Gordon.
There has been no news on the case for a long time. Mr Gibson said he could not comment on the status of the action except to say that it remained live.