Law firm’s joint venture CMC sparks PI competition by undercutting market on success fees

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19 October 2015


Online calculator “the first to show deductions”

A claims management company (CMC) set up as a joint venture between a law firm and two non-lawyer investors is looking to start competition in the personal injury market by offering clients success fees of 15%.

Since the Jackson reforms came into force on 1 April, claimant lawyers can only take 25% of a client’s damages as a success fee.

Lord Justice Jackson had expected a market to develop around success fees, but as noted by a regional costs judge in a recent ruling, this has not happened as the market seems to have settled on taking the maximum 25% as a matter of routine.

Jeremy Garside, director of Quittance, said the CMC was set up by Yorkshire Injury Lawyers (YIL) and Porthole Productions, an online marketing business, two months ago. The directors of Porthole are Patrick McIntyre and Natasha Bhatia.

Mr Garside told Legal Futures: “We want to be clear and transparent on the deductions we make from client damages. Many firms offer 25% deductions from damages, but other monies are taken, such as [after-the-event] insurance premiums.

“We will take 15% in every case and absorb the other costs, if there are any. We will not add on further costs. It is fair, it is transparent and the client knows from the outset what his commitment will be.”

Mr Garside is a former managing and senior partner of Chadwick Lawrence, a law firm with five offices across West Yorkshire which no longer does personal injury work.

Instead YIL, which is wholly owned by Chadwick Lawrence, specialises in personal injury. Howard Willis, head of personal injury at YIL, is a director of Quittance.

Mr Garside described Quittance as a commercial marketing business, which makes money by charging firms for its marketing services.

The first law firm on its panel is YIL, but Mr Garside said Quittance was already generating enough leads to require additional panel members.

“We will be speaking with a number of specialist personal injury firms which can deliver a commitment to quality,” he said. “It is a question of getting the right firms to complement the Quittance brand.

“The personal injury market has changed significantly over the last few years and practices have had to change their models. You need to get the marketing right and the administration right so the work can be done cost effectively.”

Mr Garside said clients coming to the Quittance site would begin by using the claims calculator so they can see what will happen to their costs.

“Other claims calculators show you what your damages will be. Ours is the first to show what your deductions will be.”

He added that Quittance was a “100% online offering”, which did not take part in TV advertising or Google pay per click.

Meanwhile, newly published results by insurer Admiral’s two joint venture alternative business structures show that Admiral Law – which is in co-operation with Lyons Davidson – recorded a £4.3m profit before tax on a turnover of £10.9m in 2014, while BDE Law, a joint venture with Cordner Lewis to service customers of other Admiral brands – managed £1.9m in pre-tax profits on a £4.9m turnover.


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