Second claimant Law firm goes bust in two weeks

Second claimant Law firm goes bust in two weeks

Staff say goodbye as another claims firm reported to have gone bust

Law Society Gazette

ncertainty today surrounded another significant presence in the claims sector amid reports of a second collapse in the space of a week.

Employees of Pure Legal, based in Liverpool, have posted on Twitter and LinkedIn that the firm has gone into administration and that they are seeking work. The announcement was said to be made to staff on Tuesday lunchtime, with redundancies across the board.

The firm itself, which employs 200 people, has yet to make any public statement and there has been no confirmation from Companies House that administrators have been appointed.

But a recorded message on the Pure Legal phone number tells clients that their files are being transferred to another firm, and that the business is being managed for now by Recovery First, which specialises in transferring claims from firms that can no longer handle them.

Tina Flanagan, group HR manager at the firm, posted on LinkedIn that Pure had been forced into administration and staff all made redundant. She added: ‘It was just awful to see so many people’s lives turned upside down. It was an absolute pleasure to work for such amazing people and the board worked night and day to save the business and for that I thank you all.’

It is understood that Novitas Loans, a provider of loans for legal proceedings, petitioned Pure Legal for bankruptcy last month.

A spokesperson for the company told the Gazette: ‘Novitas’ primary aim is to act in the best interests of our customers who have claims being managed by Pure Legal Limited. Our priority is to ensure that our customers are receiving the highest quality of service and care. We cannot comment further on ongoing legal proceedings.’

Pure Legal is an alternative business structure that is part of the Pure Business Group. It is unclear what effect – if any – the closure of the law firm would have on the wider group. The company is owned by Phil Hodgkinson, a former director at Slater and Gordon and Compass Costs. He is also chairman of Huddersfield Town Football Club.

The most recent annual accounts for Pure Legal Limited, covering the year to 30 March, show that while turnover increase 24% to £18.1m, profit before tax fell by 24% to £3.6m. Creditors were owed £37m within one year, compared with £24m a year earlier, and the company had outstanding loans and overdrafts valued at £21m.

Pure Business Group sold York-based Pryers Solicitors earlier this year, resulting in the transfer of 70 lawyers and support staff. Pure Legal, which was once mostly reliant on personal injury claims, had moved away from that work and handled negligent wall insulation claims, mortgage mis-selling, housing disrepair and data breaches.

A week ago, it was confirmed that Liverpool firm Hampson Hughes had gone into administration, with Recovery First enagaged in finding alternative providers for ongoing work.