Personal injury firm Asons has suspended building work on an “iconic” £8m new office in Bolton and announced a restructuring programme in response to Chancellor George Osborne’s Autumn Statement.
Asons said the government’s plans to “abolish claims for whiplash” and raise the small claims limit for personal injury cases to £5,000 meant the firm had to focus on “shoring up its defences”.
Work began on the new office in August and was due to be completed next summer. As well as office space, the development was to include a restaurant, space for business networking and corporate events, and a rooftop garden.
A spokesman said the firm would no longer be investing £6m of its own money in the new building and instead put the money into its “existing infrastructure”. He said that, under a restructuring plan, the firm would also shed 3% of its 280 staff through redundancy or redeployment.
The spokesman went on: “Asons want to avoid any historical mistakes made by other law firms, such as Halliwells, the law firm that became an anchor tenant at Spinningfields in Manchester before being dissolved with massive debts, blaming the recession and high rents.”
He said the government’s plans to scrap general damages for whiplash claims and put up the small claims limit would restrict access to justice and “impact highly on small firms” which relied on this kind of work.
“Asons is now shoring up its defences to ensure that the business survives any impending harsh weather and won’t further add to unemployment figures.
“With these amendments to the current law on injuries caused by others possibly being passed as soon as April 2016, Asons have decided to make protecting as many jobs as possible their number one priority. The decision was made after careful consideration among the directors.
“An additional effect of the restructuring will be the suspension of the development of the firm’s forthcoming headquarters building.
“It was originally scheduled for completion in mid to late 2016, but it has now been postponed while Asons puts a hold on further growth to maintain stability at its current level. The building’s original budget was £8m, of which Asons were to privately invest £6m with another £2m provided by bank funding.
“Asons will remain debt-free by not assigning these funds to the new build and instead will reinvest the £6m it holds back into the business’s existing infrastructure.”
Dr Imran Akram, chief executive of Asons, added: “It’s in the best commercial interests of Asons for the business to put its employees first and ensure that we have an efficient business model that protects the firm.
“We know that the postponement of the new offices is unfortunate for the Bolton economy, judging by all of the interest we’ve had from jobseekers and especially the next round of University of Bolton graduates. Obviously, it’s now less likely that we will be able to create the 300 new jobs that we anticipated next year.
“We want to create an anchor building that helps to secure Bolton’s economic future, but we have to do it when the time is right. Protecting the employee numbers that we currently have has to be our current priority.”
Two years ago Asons laid out its plans for massive growth and to be the “last man standing” after the Jackson reforms.