A law firm spin-off which helps insolvency practitioners (IPs) to process financial mis-selling claims against financial institutions, has been granted an alternative business structure (ABS) licence.
Formerly a business unit within City law firm Ferguson Solicitors, Ferguson Financial is said to be the first firm of its type to achieve ABS status.
Ferguson Financial now trades as a standalone law firm that advises IPs on identifying and investigating the possible mis-selling of financial products to individuals and businesses that are subject to some form of debt management or insolvency process.
Ferguson Solicitors is a specialist employment law firm that acts for City traders and professionals in disputes with their employers and is best known for suing banks.
Solicitor Charles Ferguson, who heads up both businesses, said the idea for the mis-selling arm came after it became apparent that IPs handling potential claims had regulatory difficulties with instructing claims agents and instead were more comfortable instructing a law firm. It has expanded to advise individuals and companies as well who do not have the means to pursue their claims through solicitors.
He said becoming an ABS “enables us to be more flexible in the services we offer clients as well as allowing us to share the management and control of the business between lawyers and non-lawyers”. The work is more mechanised. “It’s a different way of dealing with things and you require people who are proper managers,” he explained.
Mr Ferguson added that such work is more capital intensive as well and the ABS licence does allow for the firm to seek outside investors.
Ferguson Financial general manager Maurice Power added: “Having managed thousands of claims for clients in an IVA or subject to a bankruptcy order, we understand the needs of the insolvency practitioner. Through our in-house team of lawyers, we are able to offer advice on all areas of financial mis-selling including payment protection insurance, interest rate swaps, mortgages, mortgage protection insurance and card protection plans.
“By managing the complaint process, we are able to gain redress and pass the funds to the IP for distribution to their client’s creditors – a win-win situation for all concerned.”
Meanwhile, Norwich firm Rogers & Norton has become the latest ABS – the 194th licensed by the Solicitors Regulation Authority.
Managing partner Richard Etheridge explained that the firm was originally a legal disciplinary practice to bring a non-qualified conveyacer into partnership and on deciding to become a limited company – which he described as a “much better trading structure” – it applied to become an ABS as well.