Maxey: Regrettable dispute
A claim brought by original law firm members of the Injury Lawyers 4U (IL4U) marketing collective against its new owners has been thrown out.
His Honour Judge Cawson KC, sitting as a High Court judge, refused permission to amend the particulars of claim to challenge the removal of differential pricing between founder and other members.
This related to a slot on the rota under which leads attracted from TV advertising would be allocated, for which ordinary panel members long had to pay 50% more than founder firms.
Last December, the judge granted IL4U and directors James Maxey and Daniel Slade reverse summary judgment over the claim that an agreement dating back to 2003 allowing for differential pricing was still in force.
However, he gave the claimants – JMW Solicitors, Ralli and Howe & Co – the chance to apply to amend their claim that Mr Maxey and Mr Slade were not validly appointed, otherwise he would grant summary judgment for the rest of the claim.
Howe & Co discontinued its claim in the wake of the December decision, but the other two sought permission to amend.
IL4U was set up by the then partners of Manchester firm Amelans in 2002. In 2023, they transferred their shares to Mr Maxey, chief executive officer of Express Solicitors, which bought Amelans that summer. Mr Slade is chief executive officer (legal) at Express.
In his ruling yesterday, HHJ Cawson refused to allow the amendments on the appointments, finding them valid and effective.
Even if they were not, he added, any defect had been cured in December after the first ruling by their confirmation by the current holder of the A shares in IL4U.
This was Express Solicitors, but in case of questions about the validity of the share transfer from Amelans partner Andrew Twambley, both he and Mr Maxey – the other two possible owners of the shares – confirmed them too.
The judge refused also to allow amendment of the particulars to allege that Messrs Maxey and Slade acted in breach of the good faith obligation in the shareholders agreement.
The claimants said removing the price differential disadvantaged the founders to the benefit of the other panel firms – including Express – and gave rise to a conflict of interest.
But HHJ Cawson said they made “merely a bare assertion that the removal of the slot price differential was of no conceivable benefit to founding shareholders, without explaining why this was the case”.
The “mere fact” that Express stood to benefit, and Mr Maxey and Mr Slade may have faced a conflict of interest, “does not, in itself, mean that they acted in a commercially unacceptable way”.
Mr Maxey’s evidence was that the board believed the price differential worked as a disincentive to panel firms and would put off potential new entrants. It also thought that, if the prices were equalised, IL4U would receive much greater funding, including from Express, to the benefit of all.
The judge said no evidence was filed “to gainsay or challenge such commercial rationale, and no submissions were made criticising the rationale over and above the bare assertion that the same was to the financial disadvantage of the founding shareholders”.
The judge stressed that this was not “in any sense a mini trial of contested evidence, or judicial overreach”.
“Rather, it is a recognition that where breach of an obligation of good faith as alleged, it is incumbent upon the party seeking to advance such a case to do so on the basis of more than bare assertion, or in the hope that some evidence will turn up to demonstrate bad faith.”
He concluded that permission to amend should be refused and granted summary judgment in the defendants’ favour.
Mr Maxey commented: “Any dispute between shareholders is always regrettable and we continue to work in the best interests of IL4U which we consider to be the foremost personal injury brand in the UK at this time.
“As defendants, we were forced to protect the company at quite some cost in time and money. We are pleased to see the judge’s detailed and considered decision in this matter.”
In a separate development, Express Solicitors has unveiled its second acquisition in two weeks with the purchase of fellow Manchester firm Graham Coffey & Co.
Both firms were set up in 2000, and with Graham Coffey retiring, the two other partners and all 18 staff will join the Express team, bringing 2,700 cases with them. They will continue to work from their office in Manchester city centre.
Mr Maxey said: “Graham Coffey & Co is a great quality firm and a really good fit for us as we continue to grow and increase our caseload.”
Last week, Express acquired Liverpool-based HNK Solicitors. It now has around 820 staff.
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