Motor trade legal advice service launches CIC to handle litigation

Bowkis: CIC is a brilliant solution

An unregulated legal advice service for the motor trade has created a community interest company (CIC) so that it can provide litigation services as well.

Nona Bowkis, head of legal services at Lawgistics, described setting up a CIC rather than an alternative business structure or charity for members as a “brilliant solution”.

Clients of Lawgistics Litigation for the Motor Trade CIC must be members of Lawgistics, a trade association which provides subscribers with monthly legal updates, a legal helpline and casework service at a cost of up to £153.75 per month.

Unlike law firms, CICs are regulated by the Office of the Regulator of Community Interest Companies and any profits must be returned to the community.

Under transitional provisions of the Legal Services Act 2007 that have yet to be replaced, non-commercial bodies – CICs, charities, not-for-profit bodies and trade unions – can provide reserved legal activities without needing to be regulated.

Ms Bowkis said the company decided against setting up an alternative business structure, which would have been “really expensive” and required it to “jump through a lot of hoops”.

It would also have meant that “a lot of regulatory people would have to be employed” which was “not really the Lawgistics way” because “we like to get the job done and get it done well”.

The other option was setting up a charity which “sounded a bit weird, so we didn’t go down that route either”.

Speaking Car Dealer magazine, Ms Bowkis went on: “Then we looked at the CIC option, which was perfect really. That’s what we are, we look after the motor trade community, we’re part of that community and by setting up with that structure we could continue that legal help for court cases.

“Not only that, we could put ourselves on the record, which means telling the court that we’re acting for that client, so we’re managing everything and that means everything from the court is coming to us.

“Because Lawgistics is there and we have that experience of doing motor trade stuff day in, day out, we can do that at a subsidised rate.”

For small claims up to £10,000, the CIC charges a fixed fee of £297 plus VAT, which must be paid in advance. This includes telephone support and liaising with the other side, writing defences and drafting witness statements.

For cases worth between £10,000 and £100,000, the CIC charges 10% of the total amount claimed, which is paid in two instalments – before work begins and at the witness statement stage.

Ms Bowkis said that when the CIC won a case it could claim back costs at the much higher rate “we would have charged if we were a solicitor’s office”.

She told Legal Futures that among the Lawgistics team of 15 legal advisers, based in Peterborough, were two solicitors, three trainee solicitors and two CILEX fellows.

She said the CIC, which does not take on every case that comes to it, would be prepared to take on cases with a lesser chance of success than 50% “if appropriate and if our community member understands the risks”.

Ms Bowkis added: “Given the extensive niche experience and knowledge we hold, we want to challenge issues which affect the industry as a whole.

“The Consumer Rights Act, for example, applies equally to a toaster purchased from John Lewis, as it does to a used car with over 100,000 miles on the clock. That can lead to some misguided expectations from consumers, and sometimes perverse judgments.”

Lawgistics revealed recently that the Solicitors Regulation Authority had investigated it, the CIC and Ms Bowkis after a report from a “rival” firm, and cleared them of any wrongdoing.

She wrote on LinkedIn: “As legal professionals we all, quite rightly, have a duty to report anyone who we genuinely believe is committing a regulatory breach, for which the ultimate sanction is prison.

“However, I find it hard to believe that this rival firm had such a genuine belief as to do so would mean they were ignorant of both the appropriate regulations and of company law.

“It is no wonder their first long and inaccurate letter they sent to myself and [managing director] Joel Combes to say they would report us to the [Advertising Standards Authority], the police and the SRA if we refused to remove our new litigation service was anonymous.

“I too would have been embarrassed to put my name to it. Whoever penned it, could not even get the name of the Legal Services Act 2007 right.”

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